Disjointed

This is the reason why governance in this country often appears to be a self-defeating exercise: agencies arrive at decisions from their respective rabbit holes without looking at the larger picture.

The Bases Conversion and Development Authority (BCDA) recently disclosed it does not intend to renew or extend its contract with the Kalangitan sanitary landfill at Capas, Tarlac. The 25-year contract between BCDA unit Clark Development Corporation and the Metro Clark Waste Management Corporation ends next October. BCDA intends to convert the landfill to more tourism-oriented businesses.

The decision to end this contract is well within BCDA’s authority. But the agency appears to have overlooked the fact that there is no immediately available alternative to the Kalangitan landfill.

The Kalangitan landfill is the only such operation in the country to fully comply with the stringent environmental standards mandated by law. It serves 120 local government units in Central and Northern Luzon, handling 4,000 tons of waste each day. This landfill charges less than any other alternative in the region.

Local governments, business leaders and industries in the Clark and Subic economic zones have petitioned the BCDA to reconsider its decision on the landfill. Sudden closure of the Kalangitan landfill will create a garbage crisis for all of Central and Northern Luzon, affecting 12 million people.

The petition describes the landfill as “an integral part of our regional waste management system.” The sheer size and accessibility of this facility has served the communities in the region well during the life of the contract. No adverse environmental impact has been reported.

A more expensive and less efficient landfill is currently being prepared in Floridablanca town on the western end of Pampanga province. But this supposedly alternative landfill has not yet secured all the permits required by our regulatory agencies. It does not have the superior engineering preparation of the Capas landfill. Most importantly, the supposedly alternative landfill has vastly lesser capacity.

The petitioners are asking BCDA to consider a two- or three-year transition period for the Kalangitan facility to operate until alternative sites are ready. The existing facility has enough capacity to spare to allow such a transition period.

It will be ultimately futile for the BCDA to try and attract tourism-related investments if the region is engulfed by a garbage crisis. Without the safe disposal that the existing landfill provides, the health of the affected population could be affected. The entire region’s tourism attractiveness will decline.

There are, the petitioners point out, a surfeit of other sites that might be offered to potential locators and developers other than on top of a garbage pit. The BCDA must align its plans so that they are more mindful of the welfare of the surrounding communities, towns, and cities.

No-brainer

Meralco’s franchise as a distribution utility is up for renewal. Distinguished economist Rep. Joey Salceda filed House Bill No. 9793 proposing another 25-year franchise extension. His argument boils down to this: renewing the franchise is “good for the economy.”

“The case for renewing Meralco’s franchise,” says Salceda in a statement last week, is plain and simple: “it has complied with the conditions of the franchise law and it is good for the economy and the consumer.”

Salceda added that “Meralco provides the most reliable service among all the major electric cooperatives and distribution utilities (ECDUs), with outages suffered by the average consumer totaling to mere minutes in an entire year, versus days or weeks’ worth of brownouts for other neighboring ECDUs.”

“If all the ECDUs performed like Meralco,” Salceda further observes, “the economy would create an additional P201 billion in gross value added annually due to avoided outages.”

The largest distribution utility’s superior performance is due to its having invested P220 billion in improving its service. As a result, Meralco has the lowest systems loss charges in the region.

“As a testament to Meralco’s effectiveness as a service provider,” Salceda adds, “at least 29 municipalities and cities and at least four provinces outside the franchise area have formally expressed interest to be served by Meralco.” In many provinces adjacent to Metro Manila, the level of economic development of those served by Meralco and those who are not is quite apparent.

Because of the clamor from neighboring local governments, House Bill No. 9793 seeks to expand the scope of the company’s operations. Such a provision was absent in RA 9209 enacted in June 2003, disabling Meralco from meeting the requests of communities to be included in its coverage.

There are a few voices opposing the renewal of Meralco’s franchise. But these voices emanate from only two conceivable sources: conglomerates that want to break up the large distribution utility to get a piece of the action or inefficient electric cooperatives fearful of losing their market to Meralco.

For Salceda, size should not be taken against Meralco. It has given the distribution utility a strong bargaining position vis-a-vis power producers as well as strong company financials that enable it to invest in improving efficiency. This is the reason Meralco offers electricity rates at lower prices. This benefits the consumer and helps the country industrialize.

The problem with many of our failing electric cooperatives is, in fact, that they are too small to have the financial clout to invest in better service and more profitable operations.

It is silly to argue against Meralco’s size. What we should do is help the other distribution utilities achieve economies of scale.