Asin developer told to honor contract
MAYOR Mauricio Domogan urged the management of Kaltimex Energy Philippines to proceed with the implementation of the rehabilitation, upgrading and operation of the cityowned Asin minihydro power plants instead rationalising just to free itself from paying damages to the local government in the future.
The local chief executive revealed he recently received a communication from Kaltimex signifying their desire to talk with him to explain their sentiments over the contract that it entered with the local government.
“The best thing for Kaltimex to do is to start implementing its obligations under the contract and if the company wants to raise some issues, the same could be done later and if we find merit to such issues, then we could discuss the possible solutions,” Domogan stressed.
Domogan explained Kaltimex is looking for an excuse to free the company from paying potential damages to the city in case it withdraws from the contract.
Earlier, Kaltimex wrote the local government informing the city of its desire to withdraw from the contract it signed for the rehabilitation, upgrading and operation of the city-owned Asin mini-hydro power plants that had not been operational for over four years now.
In 2006, the city government took over the operation of the Asin mini-hydro power plants from the Hydroelectric Development Corporation (HEDCOR) after the expiration of the 25year lease agreement with the said company.
However, in 2012, the Energy Regulatory Commission (ERC) issued a cease and desist order directing the local government to stop operating these power plants because it lacked the required certificate of compliance from the regulating agency.
In 2014, the Special Bids and Awards Committee (SBAC) declared Kaltimex as the complying and responsive bidder for
the rehabilitation, upgrading, operation and maintenance of the Asin mini-hydro power plants after which the contract was signed in 2015.
The signed contract was submitted to the local legislative body for confirmation by the first quarter of 2015 and the same was only confirmed in January 2017 or nearly two years since it was submitted for appropriate action.
Domogan called on Kaltimex officials to seriously review the provisions of the signed contract to determine their duties and responsibilities in the eventual operation of the city-owned minihydro power plants within the next three years, the prescribed rehabilitation period.
The mayor admitted having wrote the company’s bonding company for the same to forfeit the P150 million performance bond posted by Kaltimex in compliance with the contract for the company to post a bond equivalent to 30 percent of the project cost before it will proceed with the detailed works that it will undertake for the eventual operation of the power plants.
Domogan added the local government is doing its best to make sure the local government will benefit from the possible operation of the city-owned power plants in the future so it can generate additional funds for the implementation of development projects and enhance the delivery of services to the residents. Dexter See/Baguio City PIO