4 big firms to bid Albay power coop management


By Manilyn Ugalde and Rhaydz B. Barcia

LEGAZPI CITY (19April2013/(PNA) – Four giant companies have signified intention to bid for the management of the Albay Electric Cooperative (Aleco), Bishop Joel Baylon of the Diocese of Legazpi, Aleco interim board chair, disclosed in an exclusive interview Thursday.

Baylon said the big firms made known their respective interests during a pre-bid conference held here last Monday to give life to the dying power cooperative through a privatization scheme.

The pre-bid conference was attended by representatives from the Aboitiz Group, San Miguel Corporation, Lopez Group and another one that requested that its identity be withheld temporarily, the bishop said.

The Aboitiz group owns the Tiwi geothermal power plant complex in Tiwi, Albay, while the Lopez group owns the Bac-Man geothermal power plant that straddles the adjacent towns of Bacon in Sorsogon and Manito in Albay.

Efforts to rehabilitate the heavily debt-burdened Aleco from the brink of collapse has failed miserably during the past 30 years that its interim deems the Private Sector Participation (PSP) Scheme as the only hope to recover from bankruptcy, according to Veronica Briones, the National Electrification Administration (NEA)-designated project supervisor for Aleco.

The Albay power coop has been alternately managed by its consumers-elected board of directors and the NEA during the past three decades.

Despite this, however, the situation has not shown signs of improvement, especially in Aleco’s high 24-percent systems loss.

Albay Governor Joey Sarte Salceda has long given up on Aleco as a “problem cooperative” that in early 2011, he forced the entire Aleco board to resign as a pre-condition to NEA to taking over its management, again to save Aleco and its more than 200,000 consumers.

Baylon, who initially heads the defunct Aleco Crisis Management Committee under the NEA management and control since 2011, however, clarified that Aleco is not going to be privatized, saying it would be merely entrusted to a company acting as a “concessionaire” through bidding for the management and maintenance of its operation.

“This is a Private Sector Participation Scheme which the interim board has crafted after thorough consultations and study,” the bishop said.

The concessionaire will have an initial contract of 25 years, renewable for another 25 years but not more than 50 years, he added.

During this period, the power co-op shall retain its cooperative character and its franchise, assets and fixtures will remain the property of the electric cooperative.

“PSP is not privatization because ownership of the cooperative remains with its member-consumers. In this regard the concessionaire will pay a concession fee and a profit-sharing scheme will be established so that when the Aleco operation results in a net margin there is also a profit- sharing between the concessionaire and the electric cooperative,” the prelate said.

The contract stipulates that the company or concessionaire shall pay off or make representation with the creditors to settle the close to P4 billion debt of Aleco in five years’ time.

It further requires the new management to inject an initial amount of no less than P250 million in the next three years as capital expenditure to rehabilitate the distribution system of the electric cooperative and result in better and more stable electric service.

Currently the total liabilities of Aleco are placed at P3.7 billion as of December 2012, the NEA said.

Baylon added that under the contract, all Aleco employees will be deemed resigned, however, the concessionaire will appropriate P260 million for those who will not be rehired and who will get their separation pay not on installment basis but on a one-time payment.

The Legazpi church leader said the bases of the computation for the separation pay are both legal and the Aleco Collective Bargaining Agreement, whichever is higher.

Aleco has an estimated 500 regular employees but is reportedly overcrowded with non-regular employees recommended by politicians and Aleco officials themselves.

Baylon explained that under a concessionaire contract, consumers will no longer suffer from discrimination, especially the poor whose power lines are easily disconnected for non-payment of bills, and from the alleged rampant padded billing wherein the usual monthly average electric bill of P2,000 suddenly would surge to P5,000.

A multi-sectoral stakeholders group, including the Aleco Employees Union, however, rejected NEA’s move, saying PSP is in itself privatization wherein consumers should expect a sure power rate increase.

The protesting group, headed by lawyer Bartolome Rayco, said it would fight for the retention of Aleco as a cooperative with a determined proposal for a “co-op to co-op” partnership as an option to bail Aleco out of its troubles.

Rayco, the lawyer of the Aleco Employees Union, said they had already negotiated with the Benguet Electric Cooperative for a “co-op to co-op” partnership.

But Baylon said the proposed PSP has generated support from the Department of Energy, NEA, Albay congressmen and local officials, saying PSP is for the general interest.

He said the protesters proposal for a “co-op to co-op” partnership had been initially considered by the interim board but, he said, it was not viable with Aleco’s P4 billion debts.

He said electric cooperatives have their own problems, too, and will not be stupid to partner with a problematic cooperative.

The Legazpi-based Ako Bicol Partylist touted Aleco in 2011 as extremely graft-ridden, under both the Aleco board and the NEA management. (PNA)


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