LEGAZPI CITY, 9Aug2013 (PNA) – The fate of debt-ridden Albay Electric Cooperative (Aleco) as to whether it should be “privatized” or not on its way to rehabilitation should be decided upon by the Albayanos, according to Albay Gov. Joey Salceda.
“The success of any Aleco rehab depends on the genuine support of the people,” Salceda said over the week as he softens his stand in favor of the “privatization” of the cooperative into the hands of any of the private power industry giants—Manila Electric Co., San Miguel Corp. and Aboitiz Power Corp. which have shown interest in acquiring it.
The privatization plan is being pushed by the National Electrification Administration (NEA) and the cooperative’s interim board of directors headed by Bishop Joel Baylon of the Diocese of Legazpi.
Earlier, Salceda said: “As Albay Govenor, I support the ongoing NEA-managed process of privatization of Aleco management to achieve our second goal after the power restoration: ensure continuous supply of power.”
Albay’s power supply was cut off at noontime last July 31 by the National Grid Corp. of the Philippines (NGCP) following Aleco’s failure to pay its bill amounting to some P1 billion to the Philippine Electricity Market Corp. (PEMC).
It was restored after 29 hours following negotiations with the NEA initiated by Albay local officials.
“We currently support the position of the interim board for ‘coop to corporate’ but if majority of the people vote for ‘coop-to-coop’ in a general assembly, we will help in making it succeed. The key to all this is the support of the people,” Salceda said.
Let the 160,000 member consumers choose between “a coop” or “a corporation” as a manager, he said, adding that there is no such thing as privatization of a consumer coop because under the law, only 3/4 of the members can dissolve it.
“Thus, what is being bid out is new management. Management by another coop or management by a big corporation. So let there be no rancor, rather there must be rational discourse on these two choices,” he stressed.
Lawyer Oliver Olaybal of Guinobatan town, who once served as Aleco board of directors chair, suggested that instead of bidding out the cooperative’s franchise to third parties, it should try corporate finance in addressing its money problems.
This means that Aleco should convert itself from non-stock to stock corporation for registration with the Securities and Exchange Commission (SEC) instead of NEA so that it could raise interest-free capital of as much as P5 billion through stock issuance to members.
This, Olaybal said, is authorized under Sec. 57 of the Electric Power Industry Reform Act (EPIRA) but was thumbed down by Bishop Baylon, being chair of the Aleco interim board chair, saying it is a different ball game, and nothing could change their decision to give away Aleco’s business — including the utilization of the firm’s assets.
“The problem is that neither Aleco nor its interim board is authorized by law to sub-contract the operation of Aleco’s franchise as under the EPIRA, only the Congress of the Philippines may grant or modify its franchise,” Olaybal added. (PNA)