Transco bidding rigged, claims debt watchdog group

The bidding for the 25-year concession contract to operate the National Transmission Co. (Transco) was one grand "lutong macao" (rigged contest) that favored alleged allies of President Gloria Macapagal Arroyo, a debt watchdog group said Wednesday night. The Freedom from Debt Coalition (FDC) took notice that the consortium of Monte Oro Grid Resources Corp., which won the bidding with the highest offer of $3.95 billion, is owned by businessman Enrique Razon Jr. Razon served as treasurer of the administration's Team Unity ticket in the May senatorial elections. FDC president Ana Maria Nemenzo also said that Walter Brown of Monte Oro Grid Resources, supposedly the Filipino partner of State Grid Corporation of China, is reportedly affiliated with Diosdado "Buboy" Macapagal, the brother of President Arroyo. Opposition Sen. Ana Consuelo "Jamby" Madrigal had previously linked Macapagal to Monte Oro. "We are not surprised that Macapagal-Razon won the bidding because of the alleged closeness to Malacañang not only of these people from Monte Oro Grid Resources, but also of the Chinese government through Monte Oro’s partner State Grid Corporation of China," said Nemenzo. Monte Oro outbid San Miguel Energy, which tabled a bid of $3.905 billion. "We doubt that a real bidding process took place," Nemenzo said. FDC said it expected the bidding to be in favor of Macapagal-Razon of Monte Oro Grid Resources since it turned out to be one of only two "qualified" bidders that proceeded with the bid. The two final bidders were the consortium of State Grid Corporation of China and Monte Oro Grid Resources and the San Miguel Energy Corp. and TPG Aurora B.V. Two Rivers Pacific Holdings Corporation and its partner Terna-Rete Electtrica Nazionale S.P.A. did not participate in the final bidding while the consortium of Citadel Holdings Inc. and Power Grid Corp of India Ltd. reportedly backed out Tuesday. "We suspect that Two Rivers did not participate in the bidding because of the serious issues we raised that it has not met the 60 per cent Filipino ownership requirement," said Nemenzo. She added that some quarters are raising possible violation by San Miguel Energy Corp. of the cross-ownership provision of the Electric Power Industry Reform Act (Epira). Allowing such company to participate in the bidding, Nemenzo said, puts the credibility and integrity of the pre-qualification and the actual bidding in question. Subsidiaries of San Miguel Energy – San Miguel Corp. Bacolod, San Miguel Mills Inc. Batangas, and San Miguel Packaging Specialists Inc. – are either generation or distribution companies or customers of Transco. The Power Sector Assets and Liabilities Management Corp. (PSALM) said it will officially declare Monte Oro group as the winner 30 days from now after another round of review is made on the submitted documents. After the declaration, the winning bidder will then apply for a franchise in Congress which will take about one year. After Congress grants the franchise, the winning bidder will pay 25 percent of the bid price. The remaining bid amount will be paid within 20 years. However, the group has an option to prepay the government if it deems necessary. Monte Oro will have one month after securing its franchise to takeover the operations of the country's national transmission highway. With the takeover, the Chinese-led consortium will have to pour in some $725 million until 2010 to upgrade and modernize the facilities of TransCo to be able to sustain the uninterrupted supply of power to its customers. Wednesday's auction is the fourth time that Transco's concession was put up for sale. The last time was in February this year when the group of Terna SpA of Italy was the sole bidder. That bidding was declared a failure. - GMANews.TV