SC allows sale of Angat Dam power plant to Korean firm

The Supreme Court has approved the sale of the 218-megawatt hydroelectric power plant (HEPP) of the Angat Dam in Bulacan to a company that is owned and controlled by the Korean government.

 

In a decision promulgated last October 9 but released only on Wednesday, the high court said the bidding and award of operation of the Angat Dam's hydropower facility to Korea Water Resources Development Corp. (K-Water) was valid and legal.

 

The SC said the bidding for the facility was transparent and objective, contrary to the claims made by several cause-oriented groups led by the Freedom from Debt Coalition (FDC) that petitioned to stop the sale.

 

The petitioners said that the sale the facility to K-Water violates Article XII, Section 2 of the Philippine Constitution, which provides that “the exploration, development, and utilization of natural resources shall be under the full control and supervision of the State.”

 

The High Court, however, partially granted the petitioners' request and ruled that the National Power Corporation should keep its controlling power over the dam’s hydropower generation, subject to the rules and regulations of the National Water Resources Board.

 

The court said the NPC should "retain full supervision and control over the extraction and diversion of waters from the Angat River,” while K-Water can use the water in the Angat Dam for hydropower generation and acquire generation assets.

 

“Except for the requirement of securing a water permit, K-water remains bound by its undertakings and warranties under the [Asset Purchase Agreement and Operations and Maintenance Agreement or APA and 0&M agreement]; NPC shall be a co-party with K-Water in the water protocol agreement with [Metropolitan Waterworks and Sewerage System] and [National Irrigation Administration], and not merely as a conforming authority or agency,” the court ruled in a decision penned by Associate Justice Martin Villarama Jr.

 

The court said that while the sale of the hydropower facility did not violate Article XII, Section 2 of the Constitution, the APA and 0&M agreement "contravenes the aforesaid constitutional provision and the Water Code."

 

The hydropower facility was sold pursuant to the privatization provision mandated under the Electric Power Industry Reform Act of the EPIRA Law.

 

The High Tribunal clarified that section 6 (a), Rule 23 of the EPIRA law, which passes onto buyers of HEPPs long-tern water rights for use of water, is “merely directory, and not an absolute condition in all cases where npc-owned hydropower generation facilities are privatized.”

 

In the same ruling, the high court also lifted the status quo ante order it issued n May 24, 2010, which earlier stopped the implementation of the agreement of the NPC and Power Sector Assets and Liabilities Management Corp (PSALM) with K-Water.

 

The Angat Dam, located in Barangays San Lorenzo and Norzagaray in Bulcan, supplies about 90 percent of raw water to Metro Manila and irrigates about 28,000 hectares of farmland in Bulacan and Pampanga. — DVM, GMA News