RP’s Oldest Power Coop Saddled with Huge Debts, Mismanagement
According to workers,
the failure of the cooperative to solve its troubles might pave the way
for its privatization, which could mean higher electric rates for
consumers in the provinces of
Davao
del Norte and Compostela Valley and the possible loss of job of its
workers.
By Gilbert Pacificar and Jetty Ayop-Ohaylan
Bulatlat Mindanao Bureau
TAGUM CITY – The
Philippines’ oldest electric cooperative is saddled with huge debts,
mismanagement and possible corruption – problems that are affecting its
service and putting at risk the employment of its workers.
According to workers,
the failure of the cooperative – Davao del Norte Electric Cooperative (Daneco)
- to solve its troubles might pave the way for its privatization, which
could mean higher electric rates for consumers in the provinces of Davao
del Norte and Compostela Valley and the possible loss of job of its
workers.
For years, Aboitiz
Power Corporation, one of the country’s largest power distributors, has
been trying to take over Daneco and has been waiting on the wings,
watching the woes of the cooperative unravel. Supporters of the workers
say Aboitiz will end up benefiting from Daneco’s problems.
Daneco’s workers have
accused their manager of alleged irregularities, among them that it has
been mismanaged and has been losing money for years.
A financial report
showed by some employees to Bulatlat show that by November 2004,
Daneco was losing P19 million.
“Despite its big
coverage and monopoly operation, Daneco cannot pay its bills to the
National Power Corporation,” said Florante Astillo, president of the
United Daneco Employees Workers Association (Udewa).
Facing bankruptcy
In order to operate,
Astillo said, the management had to borrow money from Daneco’s
“restricted” funds. “In truth, Daneco is facing bankruptcy,” Astillo said.
The workers, through
Udewa, accused the manager, Edgardo Savellano, of committing grave abuse
of authority, dishonesty, technical malversation of funds and breach of
contract and agreement.
The workers said
irregularities marred the bidding and awarding of the contract for a gym,
the acquisition of software, and the use of the cooperative’s restricted
funds as well as subsidy funds from the National Electrification
Administration (NEA).
Astillo said their
complaints have been supported by the NEA’s own audit of Daneco last year.
Udewa brought their
complaints to the board of directors, which ruled that Savellano would be
put on preventive suspension while the charges are being investigated.
During the board’s meeting on Jan. 22, at least 20 members of Udewa,
wearing black shirt, picketed inside the Daneco compound. Outside the
compound, some 100 consumers and members of the Kilusang Mayo Uno also
participated in the protest.
But the board’s
decision was not approved by the NEA in
Manila,
which had been approached by the employees to investigate the allegations
against Savellano.
Employees told
Bulatlat that what NEA did was send personnel to Daneco two weeks ago
not to implement the board’s ruling but to mediate a possible
reconciliation between Savellano and the workers.
No reconciliation
took place, however, while the “project supervisor” that Daneco promised
to provide had not yet arrived. NEA oversees the operations of the various
public electric utilities across the country.
The workers believe
that NEA’s efforts to “reconcile” them with Savellano is a form of
political intervention.
Charges
Workers told
Bulatlat that irregularities surrounded the construction of a gym for
Daneco workers in Montevista, one of the towns in Compostela Valley
province. According to them, Daneco paid a construction company, ESBE
Industrial Builders and Contractors Corp., more than P300,000 for the gym,
and that it was covered by a memorandum of agreement between ESBE and
Daneco.
But Bernie Sabido,
general manager of ESBE, denied that it transacted with Daneco on the gym
project. “Our office does not have any knowledge that there was a
memorandum of agreement between ESBE-IBCC and Daneco being executed for
whatever purpose,” Sabido said in a letter dated Nov. 5 last year.
Savellano’s biggest
sin, the workers said, was the alleged misuse of Daneco’s restricted
funds, such as money collected from consumers as deposits for meters and
the like, and the NEA’s subsidy funds as well as countrywide development
fund (CDF).
When the National
Transmission Corp. billed Daneco with nearly P18 million a few years ago,
the cooperative, with the approval of the board, dipped into these
restricted funds, on the condition that Daneco would pay these funds
gradually.
An audit by the NEA
found Daneco management culpable for violating a memorandum of agreement
between Daneco and NEA that says restricted funds can only be used for
materials and equipment, with the approval of the NEA. The NEA rule
specifically prohibits using these monies for payment of power bills.
Liquidity problems
On top of all this,
Daneco has arrears with the National Power Corp. amounting to P23.5
million as a result of an erroneous meter reading.
As a result of these
problems, according to the employees, Daneco’s services have suffered,
while consumer’s complaints have not been solved.
Daneco, created in
1971, covers 15 towns and two cities of Davao del Norte and Compostela
Valley. Its mandate is to provide power supply to consumers, even in
far-flung barangays. Its 11 sub-stations have a capacity of 78.66
megawatts.
Bulatlat
tried to talk to Savellano about the
charges against him but he was not available; his colleagues at Daneco
refused to give his phone number.
But in an interview
with the local paper Ang Mantalaan, Savellano defended himself,
saying the suspension order against him was illegal because it was not
approved by the NEA. He said he would bring the matter to the courts.
Privatization
Daneco’s workers are
worried that the cooperative’s troubles might end up in the privatization
of the electric utility. That could mean loss of job for them.
Romualdo Basilio, a
leader of the Kilusang Mayo Uno in the province, said Daneco’s workers had
sought the union’s help. Basilio believes that Daneco is headed for
privatization. He said it is only a matter of time before Daneco declares
bankruptcy and for privatization to begin.
This, he said, would
mean more power rates for consumers in Daneco’s area of coverage. Basilio
said Aboitiz Power Corp., one of the country’s largest electric utilities,
has been trying to take over Daneco, even before the Power Reform Act was
passed. The law allows the privatization of public power utilities such as
Daneco. Bulatlat
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