By ACE ALEGRE
Posted by Bulatlat.com
BAGUIO CITY – Baguio City is again roused from sleep with another multi-million peso “questionable deal”.
This time by the Benguet Electric Cooperative (Beneco) for purchasing a P184 million-worth ($4,031,639) 1.2 hectare lot located in South Drive, a prime location here, which accordingly was “extravagant” and tagged as “capricious spending.”
Not several weeks ago was a “shady deal” supposedly “developing” the Baguio Athletic Bowl by a Korean investor sans public consultations and careful study.
Spilling the beans, Councilor Fred Bagbagen has accused Beneco and its Board of Directors of capricious spending, “with impunity and without fear of being questioned.”
“The Board [of Directors] treats Beneco coffers as if it is their own private funds,” Bagbagen said apparently irked.
Appalled, the 14-member city council here joined Bagbagen’s call for Beneco to instead pay its member-consumers meter deposits amounting to P75 million ($1,643,331), payment of the P33 million ($723,065) overcharges, and payment of refund discounts.
Officials also are asking Beneco to submit documents related to the property’s purchase, audit reports and maintenance expenses.
This, while the National Electrification Administration (NEA) and the Energy Regulation Commission (ERC) were also asked to “dig into” the purchase and for the Baguio City legal office to file administrative and criminal charges, as well as file for the nullification of the deed of absolute sale.
Any huge purchase by an electric cooperative, the law requires, needs an ERC approval, but accordingly, no approval was made by the regulatory body.
Next council session, the officials summoned the property’s broker to clarify the issues raised.
Earlier last year, Beneco published plans of purchasing a 1,500-square-meter property.
This at the heels of operational losses, Bagbagen said, amounting to P23 million ($503,954) and net losses of close to P264 million ($5,784,526).
Bagbagen claimed Beneco “hid” the deal by not informing its member-consumers and for “disregarding” letters that inquired about the purchase.
Beneco is on the hot seat why it decided to purchase 1.2 hectares instead of its published advertisement of 1,500 square meters.
Bagbagen likewise was puzzled why the purchase was not included in the agenda in its December 2009 general assembly meeting and why was the purchase not included in the cooperative’s three-year capital expenditure program.
Doubts were likewise raised on the “real” purchase price of the property, while accordingly, the price of the lot was only offered at P54 million ($$1,183198).
If “talk” will be proven, voters ire will be focused also to some political bets in the city who were former Beneco board members who reportedly were “recipients” of “the fruits” of the alleged “overpriced deal”.
“All Above Board”
Beneco general manager Gerardo Verzosa explaining the Board of Directors’ (BOD) decision as “all above board” justified the purchase while assuring the loan will not be charged on consumers for it is not part of any proposal to increase rates to the ERC.
Accordingly, the lot was bought via a loan from Banco de Oro purposely as a “one-stop-shop” to house several Beneco offices in one compound aimed at further improving the electric cooperative’s efficiency. At present, said Verzosa, Beneco’s operation, management information, consumer services are located in three different locations rendering lags in giving out swift service to consumers, he explained.
The Beneco official also allayed fears of “tongpats” to the deal. “They can check out the market value,” he said as he claimed Beneco bought the property for P15,000 ($328) per square meter and actually gained even because it was the vendor who shouldered the capital gains taxes and other fees related to the sale.
The site, Verzosa further cited, “is ideal for Beneco as “we are looking forward for additional capacity which will address future load requirements.”
The Beneco manager also argued the Beneco BOD’s decision needed no consultations with its 120,000 member-consumers “because the BOD wields the corporate power of the purse”. “The act of acquisition, he added, is a board function.”
“There was no need for ERC approval,” Verzosa added, “because Beneco does not intend to include it in the rate base, hence there will also be no rate hike.”
“It is good even that some questioned it,” the official said, “so that issues may be cleared.