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By Francis Allan L. Angelo 

A NATIONAL Electrification Administration (NEA) fact-finding team found provisions in the power supply agreement (PSA) between Iloilo Electric Cooperative (Ileco 3) and an independent power producer (IPP) disadvantageous to the coop and its member-consumers.

The findings are included in the report of the fact-finding team headed by Atty. Omar Mayo, NEA legal department head.

The team was tasked to investigate the alleged bribery and disadvantageous provisions of the 25-year PSA between Ileco 3 and Applied Research Technologies Phils., Inc. (Artech).

For one, the team said that the 15-MVA substation that Artech pledged to donate to Ileco 3 after 25 years should not be considered a gift or deal sweetener. Artech made the promise as embodied in Sections 9.2, 15.1, 15.2 and 15.3 of the PSA. 

“Artech has to install and provide the 15 MVA substation, as this is necessary and indispensable in its operation to deliver electric power to Ileco 3 and not for the use of Ileco 3 itself. This will only be turned-over to Ileco 3 after 25 years free of charge but already fully depreciated by then,” the report said.

Artech also did not offer prompt payment discount (PPD) to Ileco 3, unlike the offer of renewable energy producer Asea One which signed a power supply contract with the cooperative.

“It is likewise worthy to note that all the other IPPs included the PPD in their respective offer sheets,” it said.

IMPOSSIBLE

The report also noticed that the projections of the contract on Ileco 3’s power demand “is highly improbable, if not totally impossible.”

In the first three years of the PSA, the minimum energy off-take (MEOT), or quantity of electricity Ileco 3 will buy from Artech, is pegged at 55.750 million kilowatt-hour (kWh).

The quantity will then increase by 51% to 84.480 million kWh in the 4th year and 92.4 million (66%) in the 5th year of the contract.

There is also an over contract of demand, the NEA report said.

The report said the Ileco 3 board of directors failed to evaluate Section 5.8 of the PSA which provides that the cooperative will pay the MEOT as if such quantity has been consumed.  

“The Board Directors failed to evaluate the above provisions since these are very disadvantageous to the Ileco 3 which resulted to over-contract of demand. The Minimum Off-Take provided in the contract is much higher when compared to the forecasted kWh based on the ICPM (Integrated Computerized Planning Model) of Ileco 3,” the report added.

If the PSA takes effect, consumers will pay P55.663 million a year for 8.383 million kWh of electricity.

From 2015 until the contract ends, Ileco 3 consumers will pay P181,349,960 for 29.47 million kWh of excess power.

“Unless there shall be many industrial and commercial consumers who will apply in Ileco 3, the above contracted energy cannot be consumed by the coop. The coop will have to pay the contracted energy whether consumed or not and pass it on to the consumers. In the end, it will be the member-consumers who will suffer,” the NEA report said.

The fact-finding team’s report validated The Daily Guardian’s analysis of the PSA, particularly the over-contracted demand and other onerous provisions.

Mayo recommended that Ileco 3 rescind the PSA because of its disadvantageous provisions.

The fact-finding team also recommended a formal investigation on the complaints of two Ileco 3 consumers and possible preventive suspension of Ileco 3 directors who voted for the contract.

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NEA says Artech-Ileco 3 PSA disadvantageous to coop

By Francis Allan L. Angelo 

A FACT-finding team of the National Electrification Administration (NEA) recommended the scrapping of the power supply agreement (PSA) between Iloilo Electric Cooperative (Ileco 3) and an independent power producer.

The report of the probe team headed by Atty. Omar Mayo, NEA legal department chief, said the PSA between Ileco 3 and Applied Research Technologies Phils., Inc. is “grossly disadvantageous and prejudicial to the interests of the cooperative and its members-consumers.”

The team submitted its findings to NEA Administrator Edith Bueno June 5, a month after Ileco 3 board president Mateo Baldoza revealed to Joel Tormon of Aksyon Radyo that he received P75,000 from Gov. Niel Tupas Sr.

Baldoza said in the May 5 interview that Tupas gave him the money during a meeting with Artech officials at the governor’s house in Jaro, Iloilo City.

The NEA probers said there was “undue haste, aggravated by bribery, in the signing of the said PSA, totally disregarding the findings of the very own technical personnel of Ileco 3.”

The team recommended the following actions to NEA board of administrators:

–         assign a NEA project supervisor at Ileco 3 to monitor the operations and transactions in the cooperative;

–         the PSA, upon the initiative of Ileco 3, be rescinded for being grossly disadvantageous and prejudicial to its interests;

–         investigate the notarized letter-complaints of two Ileco 3 consumers for proper action by NEA including, but not limited to, the preventive suspension of the Board Directors who voted for the PSA, either by active participation or tacit consent.

Edgardo Piamonte, NEA deputy administrator, confirmed that the team has submitted its report to the board for its approval.

Piamonte said a project coordinator will arrive in Ileco 3 Wednesday next week to start monitoring the cooperative’s operation.

Bribery

The NEA probers also found that bribery may have took place prior to the signing of the contract.

The finding was based on the sworn affidavit of Ileco 3 director Rene Arandilla and Baldoza’s radio interview with Askyon Radyo.

The investigators said Arandilla’s affidavit is credible because he personally heard from Baldoza about the additional P75,000 from Artech after the signing of the contract April 21 in Iloilo City.

“Baldoza himself showed the envelope to Arandilla, who was asked by the former to count the contents thereof, amounting to P75,000. Stated differently, the portion of the affidavit on the ‘additional’ amount in the envelope was a product of the personal knowledge of Arandilla, and cannot be denominated as hearsay evidence. In point of fact, Arandilla – with the express consent of Baldoza, was even tasked to count the money inside the ‘additional’ envelope,” the report said.

While Baldoza changed his tune on who gave him money at Tupas’s house, his recantation “cannot obliterate the fact of bribery” in the deal.

“The ‘revision’ in the recantation of the Board President touches base only on the person who gave the money, as the latter pronouncements would tend to show that the same official/representative gave the first and second amounts. At bottom, whether it was the Governor or the Artech representative who gave him the first and the second envelopes is of no moment, as it refers only to the giver but does not, in any way, deny the act itself,” the report said.

Baldoza recently said he told the National Bureau of Investigation that Tupas handed him the money last April 17. 

No bidding; railroaded 

The NEA investigators said the Ileco 3 board failed to analyze the PSA that will bind Ileco 3 consumers to Artech in the next 25 years.

It was also noted that Artech was not among those IPPs which submitted bids to the consortium to supply power to seven electric cooperatives in Panay and Guimaras Islands.

“There was undue haste in entering into contract as it took only 16 days for the board to decide to ink the contract with Artech. When compared to the consortium, the period is very short, as it took them about four months to study and evaluate offers of the different IPPs. The duration of the contract is no less than 25 years, which would all the more necessitate the exercise of prudence to afford the members-consumers the best possible deal on the matter of electricity rates. Artech personnel furnished the members of the board copies of their proposed contract for study and evaluation on April 5, 2009 and was signed April 21, 2009,” the report said.

While the Ileco 3 board claimed that Artech presented its proposal during the board meeting March 18, “nothing can be found in the minutes of board meetings that a thorough and extensive deliberation/evaluation was ever conducted on an important issue, so as to warrant the signing of the contract.”

No contract review

The NEA probe team also scored the Ileco 3 board for failure to submit the contract to NEA for requisite review of its provisions.

The NEA report said this lack of NEA approval of the Ileco 3-Artech deal “raises the proverbial quizzical eyebrows, considering that a similar PSA was entered into by and between CAPELCO (Capiz Electric Cooperative) and the same IPP.”

“Why did Artech agree with CAPELCO to subject its PSA to contract review by NEA while totally shutting out NEA from reviewing its PSA with Ileco 3?” the NEA report said.

The investigators said NEA’s omission from the deal was “designed to ‘cut corners’ and expedite the signing of the contract, as referral of the PSA to NEA for review would further delay the signing and set back the timetable.”

By Francis Allan L. Angelo

 

ILOILO-based contractors suspended by the Department of Public Works and Highways (DPWH) from bidding for local infrastructure projects can still appeal their case before the agency.

Engr. Rolando Asis, DPWH-6 regional director, said the contractors can still ask their central office to reconsider the suspension order issued by DPWH Sec. Hermogenes Ebdane.

Asis confirmed that Iloilo-based firms were among the 60 contractors barred from biddings for DPWH and other government agencies’ projects for one year.

These firms include IBC International Builders Corp., F. Gurrea Construction, J.S. Layson and Co., Roprim Construction, B.E. Construction, Patrila Builders and Topmost Development Marketing Corp.

Ebdane signed the suspension order May 21 as part of the agency’s reform initiatives following the fallout from the World Bank’s recent findings of collusion among the contractors for one of the country’s biggest road project.

Ebdane based his order on the recommendations of DPWH Joint Central Office-Bids and Awards Committee (CO-BAC).

The CO-BAC allegedly found the firms to have violated bidding and procurement procedures of locally-funded civil works.

The DPWH said the firms violated Republic Act 9184 (Government Procurement and Reform Act) with most of the contractors getting the bid documents only to ask other bidders to pay them so they won’t proceed.

Bidders who procured bid documents but did not participate three times in a year violated the DPWH’s three-strike policy.

The suspended firms particularly violated the provisions of Republic Act 9184 and the three-strike policy in procurement of civil works. Some of them have been suspended before for previous violations.

“We have given all concerned (firms) enough time and followed due process as required by law. After careful deliberation of the CO-BAC, 60 contractors were recommended for suspension and I have approved their recommendation effective immediately,” Ebdane said in a DPWH press release.

Ebdane said during the past few months, they summoned 216 contractors but only 168 responded, among these were the suspended firms.

“Those who failed to respond to the DPWH are already barred to bid, while the 60 who have responded, yet the DPWH found their reasons unacceptable, are suspended for one year effective today,” Ebdane said.

Ebdane said that after a year, these suspended contractors can ask to be reinstated in the list of accredited contractors following agency procedures.

By Lydia C. Pendon 

 

THE National Bureau of Investigation is set to conduct its separate investigation on the alleged bribery case involving directors of the Iloilo Electric Cooperative (Ileco) 3, Applied Research Technologies Phils. Inc. (Artech) and Iloilo governor Niel D. Tupas Sr.

 

This developed after the National Electrification Administration (NEA) began its own investigation on the 25-year power supply agreement (PSA) between Ileco 3 and independent power producer (IPP) Artech.

Presidential Assistant Raul Banias said he was informed of the NBI entry into the bribery investigation to hasten and determine the culpability of the persons involved in the bribery case. 

 

 

 

It was reported that Artech gave P150,000 as bribe money to members of Ileco 3 board. This was confirmed by board president Mateo Baldoza and director Rene Arandilla. Baldoza said the bribery took place at the house of the Iloilo governor last April 17 and on April 21 at Finerock Hotel. In his first interview over Aksyon Radyo, Baldoza said it was Governor Tupas who gave him the first envelope containing half of the P150,000 but later modified his revelation saying it was actually a female employee of Artech.

 

Tupas denied he helped Artech bribe the board to have the 25-year power supply contract approved.

By Francis Allan L. Angelo

 

GOVERNOR Niel Tupas Sr. was seething with anger when he heard the allegations that he bribed the Iloilo Electric Cooperative (Ileco) 3 board of directors to sign a power supply agreement with an independent power producer (IPP).

 

Tupas also hit former judge Mateo Baldoza, Ileco 3 board president, for implicating him the alleged bribery in the cooperative’s agreement with Applied Research Technologies Philippines, Inc., (Artech).

 

Baldoza had repeatedly said in a live interview with Joel Tormon of Aksyon Radyo that Tupas gave him an envelope containing P75,000 during a meeting with Artech top honchos April 17 in the governor’s house in Jaro.

 

Baldoza later contradicted himself saying a woman from Artech gave the envelope while he was in the sala of Tupas’ house.

 

Pagkabati ko sina gina-ugtum ko lang ang akon kaakig (I checked my anger when I heard the news) because I believe that the truth will come out. And the truth is that I did not give money to him (Baldoza),” Tupas said.

 

Tupas said it was only Baldoza who was claiming that he received money from Artech while the other board members denied being bribed.

 

“Of all the board members, he is the only one saying that he was bribed. Who will you believe then?

 

While he was responsible for the creation of Ileco 3, Tupas said he has no personal interest in the cooperative except to secure stable and cheap power supply for consumers.

 

“Next year we will suffer brownouts already so we need more plants. The more power plants we have, prices of electricity will be cheaper because of competition. Whoever can supply power to Ileco 3 is welcome. There are no favors, no relations and no money involved here,” Tupas said.

 

PROBE

 

During the regular session of the Sangguniang Panlalawigan Tuesday, 5th district Board Member Jett Rojas called for an investigation on the Ileco 3-Artech deal.

 

In a privilege speech, Rojas, who hails from Ajuy which is part of Ileco 3 franchise, said the deal is a big sellout of the consumers as it will tie them to high power rates offered by Artech.

 

The board member said Artech’s generation charge of P8.56 per kilowatt-hour is expensive for the consumers.

 

“This contract will result in 100% increase in electricity bills. If consumers are presently paying P100 per month, it will increase to P200 per month when the agreement takes effect,” Rojas said.

 

Vice Governor Rolex Suplico said Rojas’ measure was referred to the committee on economic enterprises and investments chaired by Board Member Arthur Defensor Jr.

 

Suplico said they will conduct an out-of-town session and committee hearing May 19 in Sara, Iloilo. The venue for the hearing and session could either be at the session hall of Sara municipal board or the Ileco-3 office.

 

Suplico said they are looking for the signed copy of the contract since all they have is a draft copy.

 

He cited Section 3 of the contract which requires approval of the Iloilo provincial government before the deal can be implemented.

 

“It is a standard practice that each party to an agreement should have signed copies of the contract to avoid alterations in the document. But Ileco 3 only has a draft copy,” Suplico said.

 

Suplico said the contract was silent on the feedstock of the biomass plant Artech is proposing to construct.

 

“What kind of biomass plant is that? What is the fuel? Grass, trees or what? If there will be a plantation for the feedstock, where it will be located? How big is the area?” he said.

 

Ileco 3 legal officer Edison Belloga said Artech will first construct a 6-megawatt diesel-fired power plant in 2010. Once the diesel plant is completed, Artech will put up a 20MW biomass power plant which will be completed also in 2010. The IPP will use sorghum as feedstock of the biomass plant.

 

CAUTION

 

In a statement, Iloilo provincial administrator Manuel “Boy” Mejorada urged the public to be more “discerning” over the Ileco 3-Artech power supply agreement.

 

Mejorada said the controversy is a “big demolition job” for political and business purposes.

 

“There are big forces behind this move, and it is obvious the targets are Governor (Niel) Tupas and the much-coveted power supply agreement with a big cooperative,” Mejorada said.

 

Mejorada said Rojas speech’s is part of a “grand scheme” to misinform the people about the transaction and portray Tupas as “having sold out the interests of his constituents” to Artech.

 

He said the offer of Artech is a two-step scheme in which the power company will build a diesel-fired plant to operate before December 2010 when the existing PSA of Ileco III with the National Power Corp. (Napocor) ends, and then shift to biomass technology two or three years later its plant for the purpose is completed.

 

“The P6.50 per kilowatt hour of generation cost applies only to the diesel-fired power supplied by Artech,” Mejorada said.

 

Once the biomass-fueled plant becomes operational, Artech will charge only P5.90 per kilowatt hour for the electricity it generates, he said.

 

He said the electric cooperative’s need to sign a PSA with a reliable supplier is “more urgent” because Napocor will stop its supply of power by December 2010, or about 19 months from now.

 

Mejorada said the “bidding” conducted by the consortium of electric cooperatives in Panay and Guimaras is not binding on them.

 

“The consortium is a loose aggrupation formed as a bargaining leverage in getting proposals from interested companies,” he said.

 

Mejorada added that the PSA is not even a perfected contract yet, as it will have to undergo scrutiny by the Energy Regulatory Commission (ERC).

 

He described the legislative investigation sought by Rojas as “a waste of time and energy.”

By Francis Allan L. Angelo

 

DEPARTMENT heads of Iloilo Electric Cooperative (Ileco) 3 will question the power supply agreement signed by an independent power producer (IPP) and the cooperative’s Board of Directors (BoD).

 

Dory Jane Canones, Finance Services Department head and Crisis Management Team (CMT) leader, said the BoD left out the management team when the board approved and signed the agreement with Applied Research Technologies Phils., Inc. (Artech) April 21 in a hotel in Iloilo City.

 

Canones said they were surprised to learn that the board gave its nod to the agreement despite the study showing that Artech’s generation cost is expensive than that of other IPPs.

 

She said the BoD should have considered the study and recommendation Engr. Antonio Lazarraga, Technical Services Department manager, to opt for a cheaper power source.

 

Canones said they plan to question the Artech deal before the National Electrification Administration (NEA) to protect public interest.

 

Atty. Edison Belloga, Ileco 3 board counsel, said Canones and Aida Lamigo, also a CMT member, were present during the board meeting at Fine Rock Hotel in Iloilo City April 21.

 

Belloga said Lazarraga did not show up in the meeting to explain his comparative study before the board.

 

“The management team only implements the decisions of the BoD which is the policy making body of Ileco 3. All agreements and transactions between the cooperative and other parties pass through the board. The board only delegates the power to carry out such agreements to the management team,” Belloga said.

 

Belloga said the board already abolished the CMT headed by Canones and appointed Lamigo as OIC-general manager.

 

The CMT was established after then general manager Gil Altamira retired, leaving a vacuum in the Ileco 3’s management side. Altamira’s resignation was allegedly “forced” by an influential political family in the 5th District.

 

The CMT, which will function until NEA appoints a full-fledged general manager, is composed of Canones, Lazarraga and Lamigo. Each member assumes as team leader for a 30-day period.

 

Belloga said the board abolished the CMT because it is ineffective in managing the cooperative.

THE DEAL Atty. Edison Belloga, Ileco 3 board counsel, discusses the stipulations of the power supply agreement with Artech. (Photo by Tara Yap)

THE DEAL Atty. Edison Belloga, Ileco 3 board counsel, discusses the stipulations of the power supply agreement with Artech. (Photo by Tara Yap)

By Francis Allan L. Angelo

 

CLEAN as a whistle.

 

The legal counsel of the board of directors (BoD) of Iloilo Electric Cooperative (Ileco) 3 denied that bribery attended the negotiations and approval of the coop’s 25-year power supply agreement (PSA) with an independent power producer (IPP).

 

Atty. Edison Belloga, Ileco 3 board legal counsel, said the BoD decided on the track record and merits of the power supply offer of Applied Research Technologies Phils., Inc. (Artech).

 

“The directors did not receive money from anyone in exchange for their approval of Artech’s offer. The board studied the offer early this year before deciding,” Belloga said.

 

Former Judge Mateo Baldoza, Ileco 3 board president, earlier claimed that he received P75,000 from Governor Niel Tupas Sr. during a meeting with Artech officials in the latter’s house in Jaro, Iloilo City last April 17, 2009.

 

Baldoza also alleged that a female Artech employee gave him another P75,000 cash during approval and signing of the PSA in the board’s regular meeting at Fine Rock Hotel April 21.

 

Baldoza, however, was not sure if the other directors also received money from Tupas and Artech.

 

Aside from Baldoza, also present in the meeting at the Tupas mansion in Brgy. MV Hechanova in Jaro were BoD vice president Emmanuel Pacardo, secretary Joy Fuentes, treasurer Asur Salcedo and Achilles Pama. BoD members Rene Arandilla and Vincent Frances Espinosa did not attend.

 

Belloga said the agreement with Artech will result in stable power supply to Ileco 3 consumers aside from providing livelihood opportunities.

 

Belloga told The Daily Guardian that Artech will first construct a 6-megawatt diesel-fired power plant within 2010.

 

Once the diesel plant is completed, Artech will put up a 20MW biomass power plant which will be completed in 2010. The IPP will use sorghum as feedstock of the biomass plant.

 

Belloga said Artech’s proposal is similar to its PSA with Capiz Electric Cooperative (Capelco) which the Energy Regulatory Commission already last year.

 

“The board saw that Artech can supply electricity by the time that Ileco 3’s supply agreement with the National Power Corp. expires December 25, 2010. The other plants will go online in 2011 yet. The board also considered environmental and health issues in approving Artech’s offer,” Belloga said.

 

Belloga said Artech will also establish a sorghum plantation to sustain the biomass plant’s operations.

 

“Artech will either buy or rent un-arable lands in the 5th district for the sorghum plantation aside from hiring workers in our area. This agreement is beneficial to us.”

 

EXPENSIVE BUT…

 

Baldoza and Arandilla also questioned the agreement with Artech because the firm’s generation cost of P8.56 per kilowatt-hour is higher than the rates offered by other IPPs.

 

The two directors said they wanted the board to study Artech’s price for 60 days because it would result in higher electricity bills for Ileco 3 consumers.

 

Ileco 3 consumers are presently paying P6 per kWh but if the cooperative starts drawing power from Artech, the rates will increase by 100% to P12 per kWh inclusive of distribution charges.

 

The comparative study of Engr. Antonio Lazarraga, Technical Services Department manager of Ileco 3, showed that Global Power offered the lowest price at P4.82 per kWh, Asea One – P5.90 per kWh and DMCI – P6.60 per kWh.

 

Belloga agreed that Artech’s generation cost is higher compared to other IPPs “but that is only temporary.”

 

“When the biomass plant starts operating, our generation cost will be cheaper than that of a diesel or coal-fired power plant. The proposed coal plants are facing environmental and health issues which the board also considered,” Belloga said.

 

Belloga said they invited Lazarraga to explain his study during the board meeting last April 21 but he did not attend.

 

“The directors wanted to ask him about his study during the board meeting but Engr. Lazarraga did not show up. The board wanted to get more details on how he was able to come up with the study and his recommendations,” he added.

 

Belloga said Artech will also put up a P30-million transformer which will be turned over to Ileco 3.

 

“We believe in Artech’s competence because it has been in the energy industry for more than 20 years (now). Other IPPs only entered the industry a year ago while Artech has a proven track record,” Belloga said.

 

Belloga said he is puzzled by Baldoza’s allegations since the latter signed the contract with Artech.

 

“The board authorized him to sign the agreement which he did. If he had reservations on the deal, he had the option not to sign the PSA. I am surprised by his allegations,” Belloga said.

 

Gov. Tupas has denied bribing Ileco 3 directors in his house saying he only facilitated the meeting with Artech officials and the BoD.

 

Tupas said he favors the deal because it will immediately solve the power crisis in Ileco 3.

 

“I am willing to be investigated on this because I did not bribe anybody,” Tupas said.

BRIBERY? Iloilo Governor Niel Tupas Sr. allegedly gave cash to Ileco 3 directors inside his mansion in Jaro, Iloilo City. (Photo by Tara Yap)

BRIBERY? Iloilo Governor Niel Tupas Sr. allegedly gave cash to Ileco 3 directors inside his mansion in Jaro, Iloilo City. (Photo by Tara Yap)

By Francis Allan L. Angelo

 

“BULIGAN ta lang sila (Let’s help them).”

 

These words and an envelope filled with cash are what former Judge Mateo Baldoza, president of the Iloilo Electric Cooperative (Ileco) 3 Board of Directors (BoD), got when he went to the house of Iloilo Governor Niel Tupas Sr. at MV Hechanova, Jaro Iloilo City last April 17, 2009.

 

The alleged bribery is being linked to the controversial 25-year power supply agreement (PSA) of Ileco 3 with independent power producer (IPP) Applied Research Technologies Philippines, Inc (Artech).

 

The PSA is being questioned by two Ileco 3 directors because Artech’s generation cost is higher than the offers of other five IPPs that joined the bidding conducted by the Panay-Guimaras Power Supply Consortium (PGPSC) last year.

 

Aside from Baldoza, also present in the meeting at the Tupas mansion were BoD vice president Emmanuel Pacardo, secretary Joy Fuentes, treasurer Asur Salcedo and Achilles Pama.

 

Those who did not show up were BoD members Rene Arandilla and Vicent Frances Espinosa.

 

“We were called one by one in one of the rooms inside the house. When it was my turn, Governor Tupas handed me an envelope while saying ‘Let’s help them’. I did not open the envelope until I got home. It was my wife who opened the envelope and found P75,000 cash inside,” Baldoza said in an interview with broadcast journalist Joel Tormon over Aksyon Radyo-Iloilo yesterday.

 

Baldoza said he also saw at Tupas’ house two Artech top honchos – company president Reynaldo Uy and vice president for marketing and business development Domingo Beltran.

 

Baldoza said he has no knowledge if the other BoD members also received cash “because we were called individually.”

 

Another envelope containing P75,000 cash was handed to the directors during the approval and signing of the Artech supply contract at Fine Rock Hotel in Iloilo City April 21, he said.

 

When asked if the money could be linked to the Artech deal, Baldoza said it might have something to do with the PSA because of the presence of Artech officials during the April 17 meeting.

 

“I did not touch or spend the money because I cannot accept it. The money is still intact and I intend to give it to the Catholic Church’s charity program,” Baldoza said.

 

DENIAL

 

In an interview with Aksyon Radyo, Tupas said he summoned the Ileco 3 board to a meeting in his house April 17 but no money changed hands.

 

Tupas said Uy presented their proposal to the Ileco 3 board during the meeting.

 

The governor said he favors the contract between Artech and Ileco 3 because of the power crisis in the province.

 

“The other power producers will operate in 2011 yet while Artech can supply immediately. I am more concerned with the supply because of the brownouts. When the other producers are done with their power plants, electricity rates will go down because of competition,” Tupas said. 

 

WHAT’S THE DEAL?

 

Based on documents obtained by The Daily Guardian, the controversy started when PGPSC, which is composed of seven electric cooperatives in Panay and Guimaras, solicited power supply bids from IPPs.

 

Five IPPs responded to the consortium’s solicitation – Global Power, DMCI, ASEA One, Global Green and PETROXY.

 

Artech did not join the solicitation and bidding but it submitted an unsolicited offer for consideration of the Ileco 3 board.

 

The board tasked Engr. Antonio Lazarraga, Technical Services Department manager of Ileco 3, to make a simulation and comparative study of Artech’s proposal with that of other IPPs.

 

Artech offered to operate a diesel-fired power plant and a biomass plant to generate electricity.

 

The study showed that Artech’s generation cost of P8.56 per kilowatt-hour was the highest compared to the rates offered by the other IPPs.

 

Global Power offered the lowest price at P4.82 per kWh, Asea One – P5.90 per kWh and DMCI – P6.60 per kWh.

 

Lazarraga submitted his study to the Ileco 3 board April 16. The following day, the directors were summoned to Tupas’ house where the alleged bribery happened.

 

Four days later, the board approved and signed the PSA with Artech despite the reservations expressed by Baldoza and Arandilla.

 

Baldoza said he wanted the board to study Artech’s price for 60 days because it would result in higher electricity bills for Ileco 3 consumers.

 

Ileco 3 covers the towns of Anilao, Banate, Barotac Viejo, San Rafael, Lemery, Ajuy, Concepcion, Sara, San Dionisio, Batad, Estancia, Balasan and Carles.

 

Ileco 3 consumers are presently paying P6 per kWh but if the cooperative starts drawing power from Artech, the rates will increase by 100% to P12 per kWh inclusive of distribution charges.

 

“Artech’s technology is good. But I had reservations because the power will be produced by a diesel power plant which is more expensive. The biomass plant will only kick in three years later. I asked the board to study the pricing and synchronize it with other cooperatives but we were outnumbered in the board,” Baldoza said.

 

Arandilla echoed Baldoza’s sentiments saying Artech’s rates will jack up prices of electricity in their franchise area.

 

“I also asked the board to study the offer for 60 days because we don’t want to burden our consumers with high prices of electricity. But two weeks after, the board approved the offer and contract with Artech,” Arandilla said.

 

Arandilla said Baldoza informed him about the April 17 meeting at the Tupas mansion but he did not attend because of a prior appointment.

By Francis Allan L. Angelo

 

THE Department of Public Works and Highways (DPWH) regional office will investigate the alleged sale of excavated earth material from the P4-billion Iloilo Flood Control Project (IFCP).

 

DPWH regional director Rolando Asis said they will wait for orders from their central office in Metro Manila since the IFCP is funded and implemented by the national government.

 

Asis said the IFCP is directly supervised by the Project Management Office of the DPWH central office.

 

Engr. Jerome Borjal of the PMO is the IFCP project engineer.

 

“If the DPWH central office orders us to probe the matter, we will investigate it,” Asis said.

 

Asis said they will also take measures if proven that there are anomalies in the disposal of excavated soil which is considered government property.

 

Presidential Assistant for Western Visayas Raul Banias will meet officials of the DPWH and contractors Hanjin and China International Water and Engineering Corp. to look into the alleged sale of excavated soil.

 

Banias said he wants to get more information on the issue by asking the concerned agencies.

 

The sale of earth materials from the project caught media attention after the so-called “concerned citizens of Iloilo City” brought the matter to Department of Environment regional director Ricardo Calderon through a letter.

 

Calderon has referred the letter to the Mines and Geosciences Bureau headed by Engr. Lee Van Juguan.

By Francis Allan L. Angelo

 

A CABINET member has taken interest in the alleged commercialization of excavated earth materials from the P4.26-billion Iloilo Flood Control Project (IFCP).

 

Presidential Assistant for Western Visayas Raul Banias said he followed media reports on the IFCP controversy, particularly The Daily Guardian’s story on the alleged sale of excavated soil to private entities.

 

Banias said he is still gathering more facts relative to the issue by meeting officials from the Department of Public Works and Highways (DPWH) and Department Environment and Natural Resources (DENR).

 

Banias holds an assistant secretary rank as presidential assistant for Region 6.

 

The controversy was exposed in the media after a group of “concerned citizens of Iloilo City” wrote DENR Regional Executive Director Raul Calderon about the commercialization of the earth materials from the project site.

 

The letter senders said the excavated earth materials are supposed to be utilized in the development of the resettlement site in Brgy. San Juan (Molo) and embankment and backfilling of the portions of the river (left after the rechanneling) which will not anymore be part of the active drainage.

 

But the letter writers claimed that personnel from the Department of Public Works and Highways handling the project and project contractors – Hanjin Corp. and China International Water and Electric Corp. – sell the earth materials to private persons to the disadvantage of the government.

 

Calderon has referred the letter to the Mines and Geosciences Bureau (MGB) headed by Engr. Leo Van Juguan.

 

Juguan refused to comment on the letter until his office has submitted a memorandum to Calderon on how to act on the issue.

 

Juguan said they might propose a multi-partite investigation on the issue since the project involves various agencies.

 

Engr. Jose Al Fruto, IFCP assistant project manager, had said that excavated soil from the project is not for sale. The materials are disposed to areas identified by the DPWH prior to the implementation of the project in 2006. 

 

Fruto said they prioritize government projects in the disposal of excavated soil.

 

Sources who sought anonymity to freely discuss the issue said foremen, checkers and watchmen hired by Hanjin are allegedly involved in the sale of earth materials to a subdivision developer and two businessmen in Jaro and LaPaz districts.

 

A truckload of soil is sold at P500 to P1,200 depending on the distance of the disposal area from the project site.

 

The excavated soil are hauled to the buyers either noontime or late in the evening to avoid catching too much attention.

 

On Friday, another developer confirmed in an interview with Johnny Diaz of Aksyon Radyo that he bought truckloads of IFCP soil.

 

The developer said a Hanjin personnel offered the excavated soil as backfilling for his subdivision project at P1,200 per truck.

 

The Daily Guardian tried to get the side of Hanjin officials but they were not available.

By Francis Allan L. Angelo

 

THE Department of Public Works and Highways (DPWH) has no control on the disposal of the excavated soil from the P4.26-billion Iloilo Flood Control (IFCP) except to identify the disposal areas.

 

Engr. Jose Al Fruto, IFCP assistant project manager, said he was tasked to identify disposal areas before the project commenced in 2006 “but the contractors oversee the disposal of the earth materials.”

 

The main component of the project is the 4.75-kilometer Jaro Floodway at the intersection of the Tigum and Aganan Rivers, which will divert floodwater coming from the two rivers to the Iloilo Strait. A 690-meter floodway is also being constructed in La Paz District.

 

Fruto said excavated soil is disposed to the following: IFCP requirements (around 40%), relocation sites and government projects, previously identified disposal areas and other areas within the 1-kilometer radius of the project.

 

Fruto said the excavated soil is not supposed to be sold to private firms or persons. If they want to get some earth materials, they will have to secure a certificate of non-coverage from the DENR.

 

Fruto said they heard reports that excavated soil is sold to private individuals, reason why they issued a memorandum to Korean contractor Hanjin that the earth materials are not for sale. 

 

According to IFPC workers who sought anonymity to talk freely on the issue, excavated soil was delivered to the properties of three businessmen near the project. A truckload of earth is sold at P1,200 to P3,000 depending on the distance of the disposal area.

 

Some of the excavated soil was allegedly sold to the subdivision owned by a certain William Gatchalian in Jaro and two Ilonggo Chinese businessmen in Jaro and LaPaz districts.

 

IFCP project manager Jerome Borjal had said that excavated soil from the project is not for sale since it is considered government property.

 

Iloilo City Jerry Treñas said some of the excavated soil was used in the development of the San Isidro relocation site in Jaro, Calajuanan landfill project in Mandurriao and other City Hall-initiated projects.

 

“What I know is that it’s for free. If it’s being sold, where does the money go? Who earned from it?” Treñas said.

 

PAVIA CASE

 

Properties owned by Mayor Arcadio Gorriceta of Pavia allegedly held a virtual monopoly as “disposal areas” for huge volumes of excavated soil from the IFCP Project in excess of the approved permits and upon express orders of the mayor not to allow disposal outside “authorized original sites.”

 

Pavia is also covered by the IFCP

 

Documents obtained by The Daily Guardian showed that Gorriceta directed the Pavia police to limit the hauling of excavated soil to only three sites, two of which are owned by his family, which are expected to gain substantial increases in market value as a result of the free backfilling materials.

 

A conservative estimate of the backfilling material that was dumped on the Gorriceta properties was placed at P20 million, at no cost to the owners.

 

In a letter dated February 1, 2009, Gorriceta ordered P/Chief Inspector Rogelio Ortigas to “strictly implement the deliveries of excavated materials from the Flood Control Project only to these authorized original sites,” with the family’s Barangay Balabag property getting more than 200,000 cubic meters and another lot near the Pavia National High School with 50,000 cubic meters.

 

Those haulers that delivered excavated soil to other sites were apprehended by the Pavia Police even though the authority to regulate the disposal of waste materials from the project is vested in the Iloilo Provincial Government.

 

The Project Management Office (PMO) headed by Engr Borjal had identified several sites in Pavia and Iloilo City as disposal areas for the excavated material.

 

However, Hanjin Heavy Industries Corp., the contractor, applied only for permits to dispose 50,000 cubic meters in the Balabag property, and 15,000 cubic meters for another lot located near the town’s high school. Both are owned by the Gorriceta family.

 

The permits were issued back in February 2007 yet.

 

However, the Provincial Environment and Natural Resources Office (PENRO) found out that as much as 200,000 cubic meters have been hauled to the Balabag property and 50,000 cubic meters to the other lot in violation of the provincial ordinance.

 

When Soledad Sucaldito, PENRO chief, investigated this, she was told by an engineer from the PMO that this happened because Gorriceta required the haulers to limit their disposal to their properties even when they had exceeded the approved volume.

 

Hanjin Heavy Industries Corp. has not explained why it picked only the Gorriceta properties as the disposal areas when there were other sites, especially low-lying lands in Pavia and Jaro which could have benefited from the backfilling material.

 

IDENTIFIED SITE

 

Gorriceta said they family’s property was identified as disposal area sometime in 2001-2002.

 

Gorriceta said he was not mayor when the DPWH chose their property as one of the disposal areas.

 

“That’s for free. We did not buy the soil. We volunteered our property because the DPWH was looking for disposal areas for unsuitable earth materials. No private property owner volunteered anyway. Maybe somebody is envious,” Gorriceta said.

 

Gorriceta said they also asked the DPWH in his April 14, 2009 letter to prioritize original identified disposal sites before giving the excavated soil to other private persons or firms.

 

The mayor also asked IFCP officials to guarantee in writing that the quantity of stockpiles reserved in enough to backfill the cut-off section of Aganan River at Brgys. Anilao and Ungka 1.

 

“The municipal council passed Resolution 2008-63 which stipulates that excavated materials from Aganan and Tigum River in Pavia should only be utilized within Pavia area. Indi pwede mapa-gwa o usaron outside of Pavia,” Gorriceta added. 

 

PROBE

 

Environment officials will probe the alleged commercialization of the excavated soil from the IFCP.

 

Department of Environment and Natural Resources (DENR) regional executive director Raul Calderon directed the Mines and Geosciences Bureau (MGB) to act on the letter of concerned citizens of Iloilo.

 

The letter exposed the alleged commercialization of IFCP excavated soil by DPWH personnel and project contractors Hanjin and China International Water and Electric Corp.

 

MGB director Lee Van Juguan said they could not comment until they have submitted a memorandum to Calderon on how to deal with the problem.

 

Juguan hinted a multi-agency probe on the issue.

 

Soil excavated from the Iloilo Flood Control Project is allegedly sold to private individuals. (Photo by Tara Yap)

Soil excavated from the Iloilo Flood Control Project is allegedly sold to private individuals. (Photo by Tara Yap)

 

By Francis Allan L. Angelo

 

WHO is responsible for the alleged commercialization of excavated soil from the multi-billion Iloilo Food Control Project (IFCP) spanning the town of Pavia and Iloilo City?

 

This question surfaced after an unsigned letter reached the office of Department of Environment and Natural Resources (DENR) regional executive director Raul Calderon April 20.

 

The letter, which was signed by “concerned citizens of Iloilo City”, informed Calderon about the commercialization of excavated earth from the project by selling the material to subdivision sites and other private projects in Iloilo City and Pavia.

 

The letter also claimed that some of the soil was delivered to the coal-fired power plant project of Global Business Power Corp. (GBPC).

 

“The excavated earth materials are supposed to be utilized in the site development of the resettlement site in Brgy. San Juan (Molo), embankment and backfilling of the portions of the river (left after the rechanneling) which will not anymore be part of the active drainage, as per submitted plan of the Iloilo Flood Control Project,” the letter said.

 

But the letter writer said personnel from the Department of Public Works and Highways handling the project and project contractors – Hanjin and China International Water and Electric Corp. – sell the earth materials to private persons to the disadvantage of the government.

 

It added that earth materials from the IFCP should be bidded out “so that the government can get the amount, which runs in millions at the current market price of P160 per cubic meter,” the letter said.

 

The letter said those behind the disposal of earth materials from the project compete with legitimate quarry permittees who pay taxes to the government.

 

It was learned that the excavated soil were delivered to the properties of three businessmen putting up subdivisions and commercial areas in Jaro and LaPaz districts.

 

Engr. Al Fruto of the Department of Public Works and Highways (DPWH) Project Management Office, said excavated soil is disposed to the following: IFCP requirements (around 40%), relocation sites and government projects and previously identified disposal areas.

 

“Areas within the one-kilometer radius of the project can be selected as disposal areas,” Fruto added.

 

Fruto said earth material can only be disposed to private lots “provided they secure a certificate of non-coverage from the DENR.”

 

When asked about the sale of excavated soil to private individuals, Fruto said it is not allowed.

 

“On the part of the DPWH, we don’t sell the earth materials. Maybe it’s the contractors who sold the soil because disposal is directly under their jurisdiction,” Fruto said. 

 

Engr. Jerome Borjal, IFPC project manager, said over Aksyon Radyo-Iloilo that they don’t allow the sale of earth materials to private projects “because these are considered government properties.”

 

Borjal said they will investigate where the soil were sold or diverted.

 

REJECTED

 

Engr. Adrian Moncada, GBPC vice president for commercial operations, said several sub-contractors of IFCP sent samples of the excavated soil to test if these can be used in the coal plant project.

 

“We rejected the soil because it is unsuitable material. The content and composition of the soil is not suited for the project. No soil from the flood control project was delivered to our project site in Brgy. Ingore,” Moncada said.

By Francis Allan L. Angelo

 

THE Office of the Ombudsman will look into allegations that some members of Task Force Red Plate turn a blind eye on certain violators of the red plate policy.

 

Virginia Palanca-Santiago, deputy Ombudsman for Western Visayas, said they will not tolerate task force members who let go of red plate violators because they are friends or acquaintances.

 

Santiago said they will verify the allegation and file charges against erring task force members.

 

The task force is tasked to apprehend government officials and workers who violate rules on the use of official vehicles. It is composed of personnel from the Philippine National Police, Civil Service Commission, Philippine Information Agency, Commission on Audit and Land Transportation Office.

 

Based on the latest data from the Ombudsman, a total of 110 government vehicles have been apprehended in two weeks.

 

Negros Occidental recorded the most number of apprehensions with 30, Capiz – 19, Aklan – 16, Iloilo – 15, Iloilo City – 13, Guimaras – 10 and Antique – 7.

By Francis Allan L. Angelo

 

THE Iloilo provincial government continues to deny receiving part of the controversial P728-million fertilizer fund even as the House and Senate grill its purported brains, former agriculture undersecretary Jocelyn “Joc-Joc” Bolante.

 

Provincial administrator Manuel “Boy” Mejorada said yesterday the provincial government refused a “very lucrative kickback” offer of 40 percent from a woman supplier.

 

Mejorada said the woman was trying to get the Capitol to submit a P10-million request for fertilizers sometime in March 2007 “but we steered clear of the fertilizer fund scam.”

 

“The moment the supplier told us that there was a 40 percent kickback in the transaction, we immediately said ‘no’ and asked her to leave,” Mejorada said.

 

Mejorada said the woman supplier, whose name he could no longer remember, had approached him with the necessary procurement documents already prepared and just awaiting the signature of Governor Niel Tupas Sr.

 

“She told me she could obtain the funding for the province through the Department of Agriculture, and all that we needed to do was to get Governor Tupas to sign the request for fertilizers,” he said.

 

However, Mejorada became suspicious about the liquid fertilizer that she was offering in the transaction and the “outrageous” offer of a 40-percent kickback. He quickly turned down the offer.

 

Mejorada said he informed Tupas about the anomalous offer. “The governor told me that I had done the right thing,” he said.

 

A few days later, the supplier went directly to see Tupas with the same offer, but the governor told her “to bring it elsewhere”.

 

Based on Commission on Audit reports, three congressional districts – 1st district, 2nd district and 3rd district – received allocations of P5 million each.

 

Bolante has again absolved President Arroyo in the fertilizer fund scam.

By Francis Allan L. Angelo

THE Office of the Ombudsman ordered the dismissal of 11 Department of Public Works and Highways (DPWH) regional officials for various offenses.

In separate orders, Overall Deputy Ombudsman Orlando C. Casimiro ordered the dismissal of the following: Wilfredo B. Agustino, Rudy G. Canastillo, Edward G. Canastillo, Cecil C. Caligan, Rolindo M. Perez, Vicente E. Vargas, Dennis P. Geduspan, Mayo R. Pelagio, Bernardo P. Yparosa, Jose M. Javier Jr., and Pio M. Gareza, Jr.

Agustino is the former DPWH-6 regional director while Rudy Canastillo is the former DPWH-6 assistant regional director.

Edward G. Canastillo and Caligan once headed the 4th Iloilo Engineering District based in Sta. Barbara, Iloilo as district engineer and assistant district engineer, respectively.

Agustino, Caligan and the Canastillos were dismissed for grave misconduct for conspiring to give “unwarranted benefit, advantage or preference” to one Rogelio Yap, the contractor for the construction of the Bancal-Leon-Camandag Road in Leon, Iloilo.

Investigation by the Ombudsman revealed that the said officials connived to make it appear that P6,733,329.23 was used for the excavation phase of the project, when what was actually spent was only P38,610.

Since Agustino is already retired, the Ombudsman imposed the accessory penalties to the dismissal order including cancellation of eligibility, forfeiture of retirement benefits, disqualification for reinstatement or reemployment and bar from taking any civil service examination.

In a separate case, Perez, Vargas, Pelagio, Geduspan, Yparosa, Javier, and Gareza – all of the 4th sub-engineering office of the DPWH office in Bago, Negros Occidental – were dismissed for grave misconduct in connection with irregularities in two projects for the improvement of the Camingawan-Pandan Road in Pontevedra town.

A special audit of the Pontevedra projects showed a discrepancy of P8,128,768.37, representing cost of materials and labor paid but not delivered or accomplished.

In addition, a discrepancy of P2,968,268.33 was also discovered representing cost of materials and labor which were utilized or applied in the project, but which were not included among the paid items.

Casimiro directed DPWH Secretary Hermogenes Ebdane to implement the dismissal orders meted on the said officials.

By Francis Allan L. Angelo

THE Office of the Ombudsman dismissed three Bureau of Internal Revenue (BIR) officials based in Iloilo City for various offenses.

Ordered dismissed from service were revenue collection officers Ma. Antonietta Tabobo and Heddan Baltazar and revenue officer Sari Umadhay.

A report posted on the Ombudsman official website detailed the circumstances leading to the dismissal of the three BIR officers.

During an internal audit of her accounts, it was found that Tabobo failed to remit her collection amounting to P564,832.091. Despite a letter of demand from the BIR, Tabobo failed to account for the unremitted funds.

Tabobo went absent without official leave (AWOL) from the BIR five years ago and is believed to be hiding in the United States.

Baltazar, who also went into hiding two years ago, was dismissed for malversation of public funds.

The Ombudsman investigation showed that Baltazar incurred cash accountabilities and unremitted collection amounting to P155,423 and documentary stamp accountabilities amounting to P5,400.

The Ombudsman also said that Baltazar had “98 sets of accountable, unused revenue official receipts with serial numbers 02538603 to 02538700 which he failed to remit.”

Umadhay was ordered dismissed for receiving P258,000 as payment for the estate and capital gains taxes of a certain Mary Lynn Franco.

Umadhay was also sacked for receiving payment for her services in processing Franco’s documents.

The Ombudsman said Umadhay violated Revenue Memorandum Order No. 15-03 which authorizes only the revenue collection officer or deputized municipal treasurer to receive payment of taxes in the absence of an authorized agent bank.

She also violated Republic Act 6713 (Code of Conduct and Ethical Standards for Public Officials and Employees) which prohibits government workers from soliciting and accepting gifts or anything of monetary value from any person in the course of their official duties.

By Francis Allan L. Angelo

THE municipal mayor of Pavia is riling against Rep. Judy Syjuco (2nd district, Iloilo) for the alleged ghost multimillion road project in his town.

The P28-million project covers the 3.4-kilometer Pagsanga-an – Tigum – Cabugao Norte provincial road in Pavia which was heavily damaged during the flashflood brought about by typhoon Frank.

In a letter dated July 17, Pavia Mayor Arcadio Gorriceta requested P28 million from Presidential Assistant for Western Visayas Raul Banias for the repair and asphalting of the said road.

Banias then endorsed Gorriceta’s letter to Department of Public Works and Highways (DPWH) regional director Rolando Asis, who then forwarded the same to DPWH Secretary Hermogenes Ebdane.

Asis recommended to the DPWH central office the inclusion of the Pavia project in the list of projects to be funded.

On August 27, Gorriceta wrote Asis requesting the implementation of the P28-million project through a memorandum of agreement offering to construct a concrete road instead of an asphalt road. The road will be 6.10 meters wide and 9 inches thick.

The mayor also informed Banias of his offer to construct a concrete road following DPWH specifications.

Gorriceta was later informed that the P28 million for the project will be released in three tranches: P10 million for the first installment, P10 million for the second release and P8 million for the last tranche.

On September 4, DPWH assistant regional director Joby Cordon informed Gorriceta that the initial P10.5 million for the project was released to the DPWH 4th Engineering District based in Sta. Barbara, Iloilo upon request of Syjuco.

The following day, Arcadio was surprised when district engineer George Suy informed him that the project was awarded to Patrila Construction Co. through negotiated contract.

Suy said the contractor has started delivering boulders and grading of the road. But upon actual inspection of the project site, Patrila has not delivered any materials and has not done any grading work.

According to Suy, the scope of work is “repair and restoration” by filling of dakal-dakal (sand and gravel), not asphalting nor concreting because they will just “restore” the gravel road to its original form.

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