PSALM: De Venecia's allegations on TransCo bidding unfounded

07 Feb 2008

The Power Sector Assets and Liabilities Management Corporation refutes the unfounded statements of Rep. Jose de Venecia Jr. regarding the public bidding for the concession to operate the National Transmission Corporation (TransCo).

In his speech before the House of Representatives last 04 February 2008, the former Speaker alleged that the bidding for the concession was rigged and was questionable. He is reported by the Philippine Daily Inquirer to have said in effect that "a company of businessman Salvador Zamora had offered a much higher bid."

The facts contradict Rep. de Venecia's allegations.

The transparency and fairness of the bidding for the right to operate TransCo were witnessed by representatives of government and non-government organizations, members of the media, as well as representatives of the World Bank and Asian Development Bank. Even the losing bidder, the consortium led by San Miguel Energy Corp., attested to the fairness of the proceedings.

The "company of businessman Salvador Zamora," apparently referring to the La Costa Development Corp., was not a prequalified bidder for the TransCo privatization because it was disqualified at the prequalification stage due to its failure to meet the requirements for bidders as mandated by the Electric Power Industry Reform Act (EPIRA). These requirements explicitly state that bidders for the TransCo concession must be financially and technically capable to operate the nationwide transmission network. La Costa failed to meet the financial criteria set by PSALM in compliance with the EPIRA. La Costa could not have offered a much higher bid than the winning bidder, and any statement to the contrary is mere conjecture. In reaction to its disqualification, La Costa prayed for a writ of preliminary injunction against the bidding before the Regional Trial Court of Makati. This was subsequently denied by the court.

In any case, the winning bidder, the consortium led by Monte Oro Grid Resources Corp., is required under the bidding procedures to obtain a franchise from Congress before it can operate the transmission network. All legislators, including Rep. De Venecia, will have every opportunity to scrutinize the qualifications of the winning bidder to operate TransCo before the halls of Congress.

Strategic Communications and Partnership Division
Tel. No. (632) 9029067