Graphic from THEPHILBIZNEWS
By Victoria “NIKE” De Dios
The need for the Philippines to achieve energy security and independence has been one of the national issues that has been pushed to the forefront. As the energy industry is faced with the challenge of supplying steady power to communities across the Philippines given the fact that the pandemic has been affecting all the industries everywhere.
The ongoing Competitive Selection Process (CSP) being conducted by Meralco to fill up a 20-year power requirement of 1,800 Megawatts will be critical to the country’s medium and long-term economic recovery.
Based on recent news updates, of the nine bidders, three have been disqualified by the Third-Party Bids and awards Committee (TPBAC) because of deficiencies in the pre-qualification evaluation of documents that were submitted. In compliance with the protest mechanism of the bidding rules, opening of bid prices of pre-qualified bidders is rescheduled to Feb. 19, or until resolution of any request for reconsideration or of any protest.
One of the disqualified bidders named in published reports is Kingstone Energy, a Chinese owned company. The same proponent of the so called “Kingstone project”, a coal power plant project with 1200 MW capacity that has yet to be built.
This raises the question on how this bidder can fulfill its bid to supply power with the ongoing Department of Energy (DOE) moratorium on the endorsement of new coal power that according to Energy Secretary Alfonso Cusi, aims to “help build a more sustainable power system that is resilient in the face of structural changes in demand and flexible enough to accommodate the entry of new, cleaner and indigenous technological innovations.”
This policy only allows coal-power projects that are in the committed and indicative list of the DOE before October 27, 2020 effectivity date of the moratorium. In as the Kingstone project is a new project, it is noted that still many [if not most] permits and licenses required are still lacking. The Kingstone project is not in the DOE list of committed power plants in Luzon and as a new project lacks the necessary permits and licenses. They are therefore not even qualified to participate in the bid.
This raises suspicion that this Chinese owned company may have influential parties pushing to win the 20-year power supply agreement for the consumption of the most economically critical region of the country. There is already an ongoing controversy on the national security risk of a Chinese state-owned corporation having just less than a majority interest in the third telco and the risk of debilitating power disruptions because of the ownership of another state-controlled corporation in the transmission franchise of the National Grid Corp of the Philippines. Should the Kingstone project somehow push thru, the Chinese will also be in our power supply ecosystem. This scenario makes us even more vulnerable to economic sabotage should Beijing’s state authorities exercise their authority over Chinese companies to execute acts of war to serve their interests.
The new law authorizing the Chinese Cost Guard to fire on vessels that intrude into their claimed areas in the South China Sea and even in their incursions in the or West Philippine Sea further makes this scenario plausible. This may well be yet another strategy in Beijing’s expansionist strategy to dominate the region.
Prof. Victor Andres “Dindo” C. Manhit, Founder and Managing Director of the Stratbase Group pointed out the need for the Philippines to be vigilant and not to succumb to pressure against Chinese-owned company that wanted to join the bidding.
“We call on the DOE, the ERC and Meralco not to succumb to any pressure that may compromise the integrity of this CSP. In as much as our country needs investments, we should only allow the right investors from the most credible companies who are able to fairly comply with our bidding processes,” Prof. Manhit said.
“The stability of our power supply is essential to our country’s economic continuity and our ability to rebound from this health and economic crisis. We must always be vigilant against any external or internal attempt to undermine our national interests,” he concluded.