Bu-lat-lat (boo-lat-lat) verb: to search, probe, investigate, inquire; to unearth facts

Issue No. 33                        September 30 - October 6,  2001                Quezon City, Philippines

They say it's nearly completed. But the 200-meter high San Roque dam looks like it hasn't yet risen more than 20 meters from its base. And it has looked this way for months. Only a spillway resting on the mountainside at the western end of the dam is close to completion. Behind and eastward of the spillway, the construction of the kilometer-wide dam clearly still has a long way to go.

Maybe it's the $1.2 billion budget for the project that's nearly consumed! Late last year, project manager John Lockwood admitted that although the San Roque Power Corporation had already spent more than 66% of its budget, its achievements so far comprised only 23% of its construction schedule, and that these mostly consisted of peripheral structures. Most expensive among those structures was a housing facility for expatriate project staff. Built and furnished like a Country Club or a plush resort, the facility had obviously cost millions of dollars in project funds.

Mario Aglipay, formerly the SRPC's resident legal officer, says that a substantial portion of project money has been spent on the bribing of government officials and the payment of fraudulent claims on land and improvements damaged or appropriated in connection with the dam construction.

On July 12, Aglipay lodged a complaint with the office of Environment Secretary Heherson Alvarez in connection with plunder in the San Roque project.

As of 1999, when Aglipay still worked with the SRPC, his company had already advanced more than a hundred million pesos to the National Power Corporation for land acquisition and property compensation. The NPC is supposed to reimburse the SRPC for this and similar expenditures because the Power Purchase Agreement between the two corporations states that the NPC should shoulder the cost of land acquisition and the compensation of "project-affected persons."

Aglipay said: “Any NPC reimbursements on the SRPC advances are...proceeds from public  funds. In the implementation of the Electric Power Industry Reform Act of 2001, the same SRPC advances are classified as NPC stranded debt or unpaid financial obligations that will be assumed by the National Government...and ultimately become a portion of the charges to be...passed on to the electric[ity] consumers.”

In fact, the entire cost of the San Roque project will be passed on to the electricity-consuming public. The Power Purchase Agreement which serves as the Build-Operate-Transfer contract between the NPC and the SRPC stipulates the payment by the NPC of both variable and fixed fees to the SRPC totaling $10 to $17 million a month once the San Roque dam starts generating electricity. Thus, for the 25 years that the SRPC will be operating the San Roque power-generating facility, the NPC will be paying it $3.0 to $5.1 billion (or, P150 to P255 billion)! How else will the NPC raise this amount if not by adding purchased power adjustments to its consumers' electricity bills?

The Power Purchase Agreement for the San Roque Project will soon be subjected to scrutiny by a team that President Gloria Macapagal Arroyo has put together recently (by virtue of Administrative Order 14) to review all contracts that the NPC has forged with Independent Power Producers, for stipulations "grossly disadvantageous to the government." For sure, this
review will show up the lopsidedness of the San Roque contract, against the Philippine Government, in favor of the Japanese and Euro-American firms within the SRPC consortium.

The contract burdens the government, both directly and through the NPC, with all project development costs other than dam construction and power plant installation. These include the costs of: (1) securing the necessary rights to land and water; (2) developing and managing the dam's watershed; (3) building all the necessary access roads; (4) installing the necessary power transmission facilities; (4) compensating and resettling all the people expropriated or displaced by the dam construction, the watershed development, the building of the access roads, and the installation of the power transmission facilities.

Also, it provides that while the SRPC can abandon the project any time this turns unprofitable, and in doing so give up only its performance bond of no more than $39 million, the government can only abort the project if it foots the bill for all costs incurred in connection with the dam construction by the time of abortion.

All this in addition to the exorbitant purchased power rates that the contract stipulates.

The President has committed herself to putting an end to hydropower projects like the one at San Roque. But she balks at our petition for her government to abort the San Roque project now. Her apologists explain that this is because it will mean being stranded with an NPC debt of close to $1.2 billion to the creditors of the San Roque Power Corporation.

We say: Get the courts to void the Power Purchase Agreement that serves as the BOT contract for the San Roque project! The agreement is illegal because it is inimical to the Filipino public; it violates public interest law.

Not only will a voiding of the contract save the Filipino people $1.2 billion in foreign debt; an abortion of the project will save the Filipino public $3.0 to 5.1 billion in future electricity bills - or
in taxes. Apologists for the dam project say it is too late for the Philippine government to abort the project because this is already 80% to 90% complete. But even the NPC admits that the dam is not even halfway built.

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