TransCo believes the violations are so severe that Congress should revisit not only the original concessionaire agreement, but also the law that deregulated the power industry to begin with.
NGCP has insisted all its transactions are above-board – and it questioned the timing of the expose.
This, as the NGCP is in talks with the Department of Information and Communications Technology (DICT) over a possible lease of the power grid to host the P200-billion national broadband network.
Secret cell sites, contracts
In a media briefing on Thursday, TransCo President and CEO Melvin Matibag said they had received reports NGCP facilities were allegedly being used to host telco equipment, and tests showed they were capable of “full-blown 4G operations.”
Matibag presented photos of cell brackets and antennas installed on transmission towers, as well as container vans with generator sets and air-conditioning units parked in substations.
“The government was never informed of these installations by the NGCP,” Matibag said. He claimed that without the consent of the Energy Regulatory Commission (ERC) and TransCo, these installations were “void of legality.”
Moreover, TransCo questioned the NGCP over the money it was making from these telco facilities. The law requires the NGCP to keep revenue from related businesses in a separate account. Fifty percent of this revenue must be used to lower transmission charges for consumers.
“Hindi naman namin sinabing bawal ang sabi namin magpaalam kayo. Dapat alam namin. Bakit? That is our mandate. That is for the protection of the Filipino consumer,” Matibag said.
[Translation: We’re not saying installing these assets is illegal. What we’re saying is they should have asked for our permission first. Why? That is our mandate. That is for the protection of the Filipino consumer.]
The other half, though, TransCo argued should go back to them, since they are the owner of the power grid. “Dapat nga wala silang kikitain sa related business diyan eh,” Matibag said.
[Translation: They shouldn’t even be earning anything from any related business there.]
TransCo requested an inspection of the telco facilities but they were denied by the NGCP, Matibag said. He did not provide an estimate of how much money the Sy-led company could be making from the suspected installations, but he alleged it had spent close to P2 billion just to put up the equipment.
Why now?
The NGCP reacted with mostly bafflement with TransCo’s accusations. It confirmed the structures were indeed telco structures. Spokesperson Cynthia Alabanza said telco companies, energy firms, even the PAGASA typically piggyback their equipment on NGCP facilities so they no longer have to acquire their own rights of way.
Most of these contracts, however, were agreed before 2009 when the power transmission business was still under TransCo. In fact, of the nine co-location agreements in force today, eight of them were only inherited by the NGCP from TransCo, Alabanza said.
“Pinagtataka ng NGCP, matagal na yang co-location agreements na yan. TransCo should know the business they turned over to us,” she pointed out.
[Translation: What we don’t understand is, these co-location agreements have been there for such a long time already. TransCo should know the business they turned over to us.]
The revenues from these contracts go to separate books, as required by the law, Alabanza also said. They’re also turned over to the ERC, with half going back to consumers as discounts.
A 2015 filing with the ERC confirms this. “The NGCP proposes the amount of P7.54 million representing 50% of its reported revenue of P15.08 million from co-location and rental of equipment. Some of these revenues were derived from rental and joint pole attachment to specific sub-transmission facilities,” it read.
The NGCP insisted, though, that the other half of the revenues should rightfully stay with them. “When TransCo signed the concession agreement in 2009, they didn’t just turn over their assets to us. They turned over their business,” Alabanza said.
Broadband budget
The question of money will be pivotal as the DICT is planning to spend anywhere between P70-200 billion to put up the country’s National Broadband Network.
It was already in talks with the NGCP to possibly lease the fiber optic cables installed in its power grid. The cables are currently being used by the NGCP to monitor the power grid in real-time, but they have excess capacity to carry broadband at the same time.
The DICT has confirmed the capacity will be enough to act as the backbone of the National Broadband Plan. This removes majority of the construction the government will have to do, and DICT officials estimated it would speed up the project timeline from just 3-5 years to as little as a year.
However, the plans could be put on hold with the debacle between TransCo and the NGCP. Energy Assistant Secretary Leonido Pulido said in an interview on Thursday that the department would prefer to resolve the issue before pursuing the National Broadband Network any further.
TransCo is set to present its allegations before President Rodrigo Duterte and his Cabinet on Monday. Matibag said he will recommend that the Electric Power Industry Reform Act be reviewed since the Philippines is the “only country with the unusual practice of splitting the [transmission] system owner and the market operator.”
He also urged a review of the NGCP’s concession agreement to make sure these supposed violations don’t happen again. “It might be a painful process a long process but if that is the only way to correct what is being done, then we must go through that process.”
As for the NGCP, it is hoping it will be given the proper forum to present its side in the issue.
(CNN Philippines, May 7) — The National Transmission Corp. (TransCo), the owner of the country’s power grid, has unleashed a raft of accusations against the National Grid Corporation of the Philippines (NGCP), its private sector concessionaire, claiming it is secretly building telecommunications facilties and hiding its profits from the government.
