BAGUIO CITY – Mayor Mauricio G. Domogan urged the management of the Kaltimex Energy Philippines, the declared lone, complying and responsive bidder for the operation of the city-owned Asin mini hydropower plants, to have more patience and wait for the action of the local legislative body on the confirmation of the hydro development contract before making any drastic move to withdraw from the deal.
The local chief executive admitted it is already more than a year since the memorandum of agreement executed between the local government and Kaltimex was submitted to the City Council for confirmation but to date, no concrete action has been taken by the council that prompted the winning developer to indicate its intention to withdraw from the contract.
“We were assured by some members of the local legislative body that an action will be made within the next several weeks after the Scout Officials for a Day so that the city can start earning from the plant once the contract is confirmed,” Domogan stressed.
Under the agreement, Kaltimex will start paying the local government, within a 6-month period, the amount of P18 million as partial payment of the city’s share while processing all the permits required for the full operation of the city-owned power plants which have an estimated power output of at least 8 megawatts.
It will be recalled that the memorandum of agreement between the city and Kaltimex was submitted to the local legislative body for confirmation last February but to date, no council action was made for the purpose.
The operation of the Asin power plants, previously operated by the local government, was stopped in October 2012 after the Energy Regulatory Commission (ERC) discovered that the plants do not have the required certificate of compliance from the regulating agency. The closure resulted in an annual loss of P30 million that was supposed to be used for the implementation of more development projects and the improvement of basic services.
Baguio owns the distinction of being the lone local government in the country that owns power generation plants that were turned over to the city by the Americans.
In 1981, the local government privatized the operation of the power plants and awarded the 25-year contract to the Aboitiz-owned Davao Lights which in turn turned over the management and operation of the plants to its sister company, the Hydroelectric Development Corporation (HEDCOR) which operated the plants until the expiration of the agreement in 2006.
The local government then took over the operation and management of the Asin mini hydropower plants in 2006 until the stoppage in 2012 upon orders from the ERC and remained non-operational up to the present.
Domogan called on Kaltimex management to remain calm and sober in awaiting the council action relative to the agreement and not to make drastic actions that might compromise the status of the contract.
By Dexter A. See