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Business

Is this crony abandoning Ate Glue?

- Boo Chanco -

Now that Ate Glue has vowed to ensure a peaceful turnover of power to the next chief executive on June 30, assuring critics that she would not stay a day longer in office, should we heave a sigh of relief? Remember she also said during a Rizal Day speech she wouldn’t run again for President.

But taking her word for whatever face value we can muster, perhaps she really is leaving. I was told, she would rather remain glued but things have so evolved that there is no turning back. Look, it was pointed out, Ate Glue is flying to Spain after attending an Asean meeting in Hanoi. There is no official reason for the visit to Spain, a favorite destination of Ate Glue and Spain is a long way from Hanoi to be a side trip. Bakit kaya?

No wonder even some of those close to her are going ahead with their own plans in an Ate Glue-less world. Take the case of a prominent crony who was even the chief financial officer of Ate Glue’s personal political party. He has virtually unglued himself from her and, if the grapevine is to be believed, even trying to get into the good graces of the top presidential contenders. My sources in both camps confirm approaches were made but couldn’t (or wouldn’t) confirm if the offered political donations were accepted.

 Since a good part of the business of this crony is foreign based, it is easy enough to disengage at a time like this. But this crony is a master of timing and knows when to cash in on an investment. He disengaged from one of the bigger investments in the local energy industry. It didn’t matter that he worked hard to win controlling interest in the privatization of TransCo.

This crony isn’t even crying all the way to the bank… why should he? The grapevine says the investment in the National Grid was offloaded at an eye popping profit to the San Miguel Group, which previously lost the bidding for the Grid. When the crony offered to buy San Miguel out, San Miguel countered with a buy me out too. The crony asked how much and when he heard what San Miguel was ready to pay, called the bluff. That’s how this crony flipped a $40 million investment to earn him $800 million in less than two years.

That puts San Miguel in a bind because Epira does not allow any one group to have interests in the Grid if it has interests in generating plants and distribution. San Miguel has interests in all three. No wonder there is a stand-in for the Grid investment. That goes to show how strong San Miguel is and perhaps exposing its real owners now. But will the new administration allow this situation to linger?

San Miguel will be the last crony standing because it isn’t a crony. It is the real thing. San Miguel cannot disengage from its beneficial owners and I am told that it is no longer Danding Cojuangco.

But even San Miguel isn’t pushing its luck. It quietly backed out of the Laiban Dam project. With the amount of investment required and with the political environment after June still up in the air that was the right thing to do.

If San Miguel had the sense to be prudent, why did it and sister company Petron allow the whole world to know the dirty secret by sponsoring an ongoing media blitz, Ating Tuwirin, that seeks to herald Ate Glue’s so-called achievements in a better light… The logos of Petron and San Miguel are very prominent among the sponsors that are mostly government corporations like the PCSO that, incidentally, should be spending all that money on charity instead.

San Miguel and its beneficial owners should worry about what happened to Thaksin Shinawatra where the Thai Supreme Court seized $1.4 billion of $2.3 billion in contested assets. The judges said that Mr. Thaksin shaped government mobile phone and satellite communications policy to benefit his firms, earning wealth from shares sales in the company through “inappropriate means.”

But that is Thailand and we are the Philippines. Past Philippine Presidents have no fear of retribution even if a court finds them guilty of corruption. They will always be pardoned for the sake of reconciliation.

Energy options

I received an e-mail from Marcial Ocampo, a former colleague in the Velasco era Ministry of Energy. Reacting to the current predicament in Mindanao and the Visayas, Mr. Ocampo disabuses our minds about the adequacy of so-called clean and renewable energy options. He says we have no choice but to use coal, in some form. As for the cost of power, he says we cannot hope to really bring down our costs to make them competitive without nuclear. Here are excerpts from his fairly long e-mail.

“In the case of Visayas, Mindanao and even Luzon, after we have exhausted natural gas, geothermal, large hydro, mini-hydro and minimized imported and expensive oil, the only viable alternative is coal-fired power plants - and in this case, only “clean coal technology” such as the CFB which is the technology of choice by KEPCO in their power plants in Cebu and the Visayas (Iloilo). No amount of posturing from Greenpeace can minimize the appetite for coal since there is no other viable and environmentally acceptable alternative in the short and long term for the country.

“Likewise, I also prepared a paper and made calculations that using optimal dispatch, reviving the Bataan nuclear power (620 mw) or construction a new one, will result in an 8.38 percent drop in the weighted average levelized cost of electricity (using the US NREL formula).

“Hence, no matter how we optimize and structure our power generation facilities, we can never hope to reduce our power costs relative to our advanced neighbors (Taiwan, China, Korea and Japan) as long as they have nuclear power and our country has none. We have simply approached the plateau, and that is the reason why Rep. Mark Cojuangco is right when he proposed legislation for funding the complete review and study on keeping the nuclear power plant option open for the country.

“Even if we decide to go nuclear, the first kWh of nuclear power won’t come on stream within 15-20 years because of the need to train nuclear power plant operators (those previously trained by NPC are now gainfully employed elsewhere), set up the nuclear regulatory framework and bureaucracy, study, design, finance, order the nuclear power plant equipment, ship, construct, test and commission.

“The country in 1989 was on the verge of commissioning and warming up the nuclear fuel rods of BNPP… but mothballing of the BNPP resulted in daily four-sixhours of rotating brownouts nationwide that could only be solved immediately with expensive diesel-field diesel engines/power barges and simple cycle gas turbine units (only 35 percent efficiency).

“Long term planning requires that hydro power should not have capacity factors higher than 40-50 percent in order to assure sufficient reserves during the summer months, and these reserves can only be provided by the reliable coal-fired power plants (since geothermal, natural gas are limited) and mini-hydro, wind and solar are intermittent and likewise more expensive.”

Virtual good as real

This one was contributed by Marilyn Mana-ay Robles.

A married man went into the confessional and said to his priest, “I almost had an affair with another woman.”

The priest said, “What do you mean, almost?”

The man said, “Well, we got undressed and rubbed together, but then I stopped.”

The priest said, “Rubbing together is the same as putting it in. You’re not to see that woman again. For your penance, say five Hail Mary’s and put $50 in the poor box.”

The man left the confessional, said his prayers, and then walked over to the poor box. He paused for a moment and then started to leave.

The priest, who was watching, quickly ran over to him saying, “I saw that. You didn’t put any money in the poor box!”

 The man replied, “Yeah, but I rubbed the $50 on the box, and according to you, that’s the same as putting it in!”

Boo Chanco’s e-mail address is [email protected]. This and some past columns can also be viewed at www.boochanco.com

vuukle comment

ATE GLUE

CRONY

EVEN

MIGUEL

NUCLEAR

POWER

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SAN MIGUEL

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