The abandoned nuclear power plant, today’s high electricity prices and unsteady supply

Efforts to transfer responsibility for the decision to shelve the nuclear power plant in Bataan from President Cory Aquino came my way via a reaction to my column last week (Aug.t 27, 2014). There is blame shifting for the costly error of the one who made the decision.

“Passing the blame.” Mr.Marcelo Tecson wrote a letter reacting to the piece. Apparently formerly associated with the National Power Corp., he writes (with his own emphases in bold):

“Pres. Cory’s decision not to use the nuclear power plant was not irreversible. President Fidel Ramos who succeeded her could have promptly initiated the operation of the nuclear plant because it was essentially preserved and intact when he assumed the presidency.”

Mrs. Aquino was president for almost eight years, from 1986 to 1992. The nuclear project was abandoned by 1987, and Fidel Ramos was president from 1992 to 1998. Six years had passed since the nuclear power decision when Ramos took power.

“Preserved and intact” is hardly a description for the project that had been abandoned, for which a lot of legal contracts had by then been either rescinded, expired, or rendered null and void, in which actual machinery displacements and other actions had been undertaken!

Reversing the decision would have therefore entailed another re-escalation of costs of the nuclear project.

In the next sentence, Mr. Tecson reminds us of the “take-or-pay” provisions of the subsequent new capacities established to fill the gap in electricity supply. Would those new contracts have happened if the country had experienced a seamless acquisition of new electricity supply through the nuclear power?

“And ex-Sen. Saguisag admits.” Into this point enters Mr. Rene Saguisag, former member of the Cory Aquino cabinet (in charge of the committee to act on the nuclear power plant) and later senator. He wrote, not to me but to Mr. Tecson, who passed on his note to me.

Mr. Saguisag pats Mr. Tecson in agreement: “We cannot be blamed for a non-granitic decision [that Fidel V. Ramos] & Co. could have tried to reverse.” President Ramos is very much around and I do not wish to pre-empt his reasons for not reversing the decision. (Later, I give my own take on this subject.)

Former Sen. Saguisag owns up to the advice that he had given to Cory Aquino to abandon the nuclear power plant. I am, however, turned off by the cavalier attitude of high-mindedness and arrogance in passing off responsibility and blame away from himself.

Mr. Saguisag says the Chernobyl accident in 1985 was the Deus ex machina [that] “made it easy” for the committee to recommend “mothballing” the project. The committee’s “experts” were convincing.

In the highly politicalized  atmosphere that was further buttressed by the Three-Mile Island and the more recent Chernobyl cases, the politicians were lording it over, with their expert resources, their own opinions and prejudices, sometimes feeding on the fears of a lot of people.

In response to the various claims of the anti-nuclear lobby, and especially after the special hearings that former Sen. Lorenzo Tanada conducted to listen to these criticisms as ordered by President Marcos, additional safety investments were added to the nuclear project, hence further causing a rise in costs of the project.

Moreover, it was well-known that atomic inspections under IAEA (International Atomic Energy Agency) had been monitoring the safety features of the plant. Only the brave and determined leaders in other countries (Taiwan, South Korea, and Japan along our “ring of fire” neighborhood) stuck to their nuclear decisions because they saw well beyond what our domestic politics could only cloud up.

But, reflecting further on the issue of safety today, Mr. Saguisag seeks the high ground and disdainly asks: “Could we handle a nuke accident? Are we as sophisticated like the Japanese in Fukushima? ... We have our trikes. Japan has the Lexus.”

I say : We might not be producing the Lexus but we can, with training of mechanics and engineers, keep the Lexus running tip top.

The odds were that technologically, we could keep pace with the human capital required to keep and maintain a nuclear power plant. A major component of the nuclear project was the building of that human complement to manage the plant. Thus, there was a major investment in nuclear manpower that the government had been then carefully nurturing.

As soon as we abandoned the nuclear project, we also lost the human capital and the resources that we invested to get them. Many of the trained engineers for the nuclear project are now working in other countries, probably helping maintain and operate nuclear power plants.

“Could President Ramos have reversed the nuclear power decision?” Why should those who, today, know it was wrong to shelve the nuclear power plant then, now want to include President Ramos to share the blame for not reversing the Cory Aquino mistake?

First, they want to deflect the responsibility for the bad error of decision-making. Second, they do not like the “take-or-pay” provisions like almost every one.

Remember the energy crisis of those years! Also, the partisan passions still stoked a vengeful transition against the fallen government of Marcos. As an elected leader with a narrow margin over many other candidates, winning a mere pluraility (of just over a quarter of the electorate), Ramos who was Cory’s chosen successor was reaching out to all sectors and could not antagonize any constituents.

“Summary.” If Cory Aquino had put to use the nuclear power plant, there would not have been a power crisis. President Ramos in succeeding could have embarked on a higher phase of economic development for the nation.

Now, to summarize: Cory Aquino’s ill-advised failure to put the nuclear project on stream led the nation to pay for the following: (1) The full cost of the nuclear power plant, with zero electricity. (2) All the over-pricing that political partisans were saying was the cost of the project. (3) All interest payments related to long term loans related to construction and machinery. (4) All the human capital invested in building an engineering and scientific manpower designed to man the nuclear plant. (5) All the downtime and lost productivity to the nation during the power outages in those years.

So, who is to blame?

My email is: [email protected]. Visit this site for more information, feedback and commentary: http://econ.upd.edu.ph/gpsicat/