The similarity of the Palawan Electric Cooperative’s (PALECO) dilemma to that of Manila Water just over a year ago is uncanny. Maynilad, the Ayala group-controlled water concession, had found itself at the receiving end of President Rodrigo Duterte’s rant following a water shortage situation at the metropolis.
Duterte threatened to expropriate the business, citing public interest as a basis and claiming that its concession agreement with the government was fraudulent to begin with. At that time, Maynilad had just won an arbitration case against the government that required the state to pay over P7 billion in damages for violation of the contract.
It didn’t take long after Duterte’s rant that the Ayala’s decided to give up the lucrative water business to Prime Strategic Holdings of emergent business tycoon Enrique Razon. They even opted not to pursue anymore the court-imposed penalty against the government.
Razon had risen to become one of the country’s most successful businessmen under the Duterte administration, operating the lucrative port operations with his International Container Terminal Services Inc (ICTSI) and venturing into power and energy. He also played key private sector roles in the administration’s pandemic response including the controversial plan to convert Nayong Pilipino into a vast vaccination site.
Razon’s interests came closer to home when several years ago, Palawan’s congressional representatives from out the blue filed a bill in the House seeking to grant a separate power distribution franchise to his company MORE Energy. The move not only caught PALECO by surprise; it was a novelty for its sheer brazenness.
Recently, Governor Jose Alvarez brokered a meeting between PALECO directors and key officials of MORE to pitch a joint venture idea, with the latter having a controlling 70 percent interest over the existing PALECO franchise.
The recent presidential rant has imposed tremendous pressure on PALECO to fold up and sell out to Razon, whose obvious interest in the franchise has gained powerful local political constituents.
How the PALECO leadership will deal with such political pressure should be apparent in the coming days or weeks. With no intention of demeaning its integrity or capability as a management body to represent the interest of the “owner-subscribers”, mainly the individual families who pay monthly electric bills, most of these officials are there mainly because of political endorsements.
Us consumers who curse at PALECO every time there is a blackout no matter that the sin is equally shared by the government, the National Power Corporation, and the independent power generators are challenged to understand the bigger implication of what is coming down, after the last week’s presidential rant.
The first order of business is for PALECO officials to come clean and practice transparency on the decision that they will have to eventually make on behalf of the cooperative. The second order of business is for the government to lay its cards on the table as to why it presumes that a private company takeover of PALECO can be beneficial to the public good.