BAGUIO CITY – Mayor Mauricio G. Domogan urged the members of the City Council to immediately act on the pending confirmation of the memorandum of agreement entered into by and between the local government and Kaltimex Energy Philippines, the winning bidder, for the operation of the city-owned Asinminihydro-power plants, in order to make sure that the city can maximize the benefit from the power plants.
The local chief executive said there are reports that the winning bidder is allegedly planning to withdraw from the contract because it has been more than one year and six months that it had been waiting for the confirmation of the contract by the local legislative body.
“We have to make sure that the local government maximize the benefits from the operation of the Asinminihydro power plants thus the City Council must already confirm the pending contract so that the developer will start paying the city the agreed amount while it is working on the issuance of the necessary permits to operate,” Domogan stressed.
It took four failures of bidding by the Special bids and Awards Committee (SBAC) created for the purpose over a three-year period before the maintenance and operation of the city-owned power plants was awarded to Kaltimex Energy Philippines as the winning bidder.
According to the Mayor, Kaltimex will start paying the local government the sum of P18 million over a six-month period after the confirmation of the contract by the local legislative body as mandated by law.
It will be recalled that the Benguet Electric Cooperative (BENECO) stopped purchasing the power produced by the Asin mini-hydropower plants in October 2012 after the local government was not able to secure the required certificate of compliance from the Energy Regulatory Commission (ERC).
The contract was submitted by Mayor Domogan to the City Council for confirmation early last year but it was not acted upon and was overtaken by events up to the present.
Under the agreement, Kaltimex is obliged to secure the pertinent permits required by relevant government agencies and the host communities prior to the implementation of the rehabilitation and the subsequent operation of the city-owned power plants that have a capacity of at least 4.2 megawatts of renewable energy.
He added the confirmation of the local legislative body on the contract is the only thing being awaited by the developer before it can start improving to produce at least 8 megawatts.
Domogan explained the possible withdrawal of the developer from the agreement will bring the city back to the drawing board. This will mean losing the potential benefits from lost time.
By Dexter A. See