Court ruling on power plant disadvantageous to government – SPC

CEBU, Philippines - Publicly-listed SPC Power Corporation called the recent ruling of the Supreme Court on the Naga Power Plant Complex in Cebu as "grossly disadvantageous to the government."

"The company  is preparing its motion for reconsideration to the High Court which reiterates SPC's position that the decision destabilizes the investment climate in the Philippines and retroactively changes the rules on competitive bidding," SPC in a statement said.

SPC said that with the SC's ruling to reinstate the notice of award to Therma Power Visayas Inc. (TPVI), the government not only stands to lose P54 million, but is deprived of a rebid of the Naga Power plant, which would likely result in an even higher price for the government.

SPC said that the move followed the previous ruling of the High Tribunal which declared as null and void SPC's right to top the bid of TPVI by 5 percent.

It said that the High Court's decision to reinstate the award of the Naga facility to Therma Power is contrary to its earlier position that "public bidding is the better means to secure the best bid for the government.

In its decision dated September 28, 2015, SC stated that "attracting as many bidders to participate in bidding for public assets is still the better means to secure the best bid for the government and achieve the objective under the Electric Power Industry Reform Act to privatize National Power Corporation's assets in the most optimal manner."

The SPC added that TPVI offered a bid of P1.088 billion during the bidding of the Power Sector Assets and Liabilities Management Corporation in March 2014, wherein the right to top was known to the bidders.

SPC said that they exercised the right to top and matched TPVI's bid and paid an additional P54 million or a total of P1.143 billion to PSALM.  

Eventually, the Naga facility was awarded and turned over to SPC in September 2014. In June 2014, then Senator Sergio Osmeña III filed a case with the SC against SPC and TVPI questioning the validity of the right to top, arguing that it is allegedly non-competitive.

"We urge PSALM, chaired by the Finance Department, to file its own motion for reconsideration as clearly, the decision is disadvantageous to the government at a time when government needs much-needed funds for employment and other basic services," SPC further said. (FREEMAN)