PSALM aims to sell more assets
The Power Sector Assets and Liabilities Management Corp. (PSALM) has set its sights on selling more assets to reduce the debts incurred by the National Power Corp. (NPC) to P358 billion by the end of 2021.
As of end-june, PSALM’S financial obligations stood at P368.08 billion, the state firm’s president Irene Joy Garcia said in an online press briefing Monday. “We hope to bring down the obligations to P358.72 billion this year.”
PSALM had just completed the successful bidding of its property in Paco, Manila. The Manila electric Co. submitted the highest offer amounting to P632,162,185.00.
“Next in line is the Pampanga property. hopefully, that should happen in the next month. Also, we have some assets in Limay and in Baguio. Casecnan will be bid out by mid-september this year and, hopefully, we will award it in November,” said Garcia. PSALM has set a minimum bid price of P741.327 million for its 50,447-square meter real estate property in Mexico, Pampanga.
For the real estate assets in Baguio and Limay, Bataan, Garcia said her office is coordinating with the local government in Baguio City and is “finishing up the study in Bataan for a possible public bidding.”
For the privatization of the 150-megawatt Casecnan hydropower plant in Nueva ecija, PSALM will immediately begin the bidding process to secure an operation and maintenance service contract (OMSC) for the project to ensure continuous operations upon its turnover to the government.
The OMSC will be effective until PSALM completes the plant’s privatization via public bidding by the end of 2022.
Garcia said proceeds from a successful privatization of the Casecnan power plant would be divided between the National Irrigation Administration and PSALM in accordance with their ownership interest—40 percent and 60 percent, respectively.
At end-2020, PSALM’S debt stood at P381.91 billion. It had reduced its debts by P40.103 billion, bigger than its target of P10.18 billion for 2020.
PSALM sources funds for debt payment from privatization proceeds, which include payments from independent power producer administrators and from the concession payments from the transmission business. The state-run firm has disposed of a total of 10 real estate assets in Agusan in Bukidnon, Maco in Davao de Oro, Nasipit in Agusan del Norte, Loboc in Bohol and Camalaniugan in Cagayan, raising revenues of P51.65 million. Other disposable assets from retired equipment and scrap materials were sold by PSALM for P26.45 million.
To generate additional income, PSALM entered into short-term lease agreements with government offices over certain assets that are not yet scheduled for privatization, raising additional revenues of P29.50 million.
Backpay
PSALM also said it has transferred a total of P4.31 billion to the NPC to cover the backpay and other benefits due to nearly 2,000 former employees retrenched in 2003 as part of NPC’S downsizing as mandated under the electric Power Industry Reform Act (EPIRA).
It was only in February this year when the NPC started paying an estimated 1,958 claimants entitled to backwages and other benefits following a Supreme Court (SC) ruling in 2017 ordering the state-run power firm to pay its retrenched employees, and the 2019 decision by the Commission on Audit (COA) giving the go-signal for the settlement of such claims.
As of August 10 this year, NPC has already released P3.79 billion to the claimants. To recall, many employees were terminated as part of the firm’s reorganization and were given separation benefits when the EPIR A was implemented almost two decades ago. Some of the laid-off workers were rehired by either the NPC, National Transmission Corp. (Transco), or PSALM.
Among the terminated NPC employees are members of the Drivers and Mechanics Association (DAMA), who then contested before the SC the decision of the National Power Board (NPB) to terminate their services.
PSALM is not a party to the case but became involved in this issue because the EPIRA had mandated PSALM to take over NPC’S assets and liabilities.
Garcia said after COA’S final approval of the claims settlement and the validation of the list of claimants, PSALM immediately raised the funds needed to settle DAMA claims in support of the plight of claimants who have waited for many years to be compensated.
PSALM transferred to NPC an initial amount of P500 million in November last year to enable NPC to start complying with the SC and COA rulings, even though it still has a pending petition before the high court seeking to clarify several legal aspects of the COA’S 2019 decision, Garcia added.
“We already transferred substantial amounts to NPC to pay for the DAMA claims. The latest remittance was in July this year. So far, PSALM has transferred a total of P4,310,037,838.68 to NPC for the payment of the DAMA claims.”
Based on NPC’S records, 893 claimants have already received their checks representing their monetar y claims for backwages and other benefits. However, there are still some retrenched NPC employees who are entitled to backwages and other benefits that have yet to receive their payments because they or their representatives have yet to submit the necessary documents to substantiate their standing as claimants.
PSALM and NPC have so far jointly endorsed to the COA the payment of 1,062 claims of which 1,056 were validated by COA as qualified claimants. According to NPC, there are still 718 claimants with incomplete documents.
“There are delays in the compliance with the basic documentary requirements by some claimants. Furthermore, due to the Covid-19 pandemic and with some claimants residing outside Metro Manila or outside the country, there are mobility restrictions preventing them from submitting the required documentation especially considering that most claimants are of old age,” Garcia said.
To fully fund the DAMA claims, Garcia said PSALM estimates that it will still need about P4.8 billion for 2022.
“The P4.8 billion cash requirement will be covered by the balance of the 2021 approved supplemental budget amounting to P1 billion more or less, and prospectively by a P3.8 billion proposed DAMA budget for 2022.”
In September 2006, the SC declared as void and without legal effect the decision of the National Power Board on the termination of the DAMA claimants.
The High Tribunal issued a resolution in September 2008 stating that the separated NPC employees have the right to be reinstated or entitled to separation pay in lieu of reinstatement, along with backwages, wage adjustments, and other benefits.
The SC issued another resolution in November 2017 ordering the payment of the backwages and other benefits of those that were not reinstated, and directing the terminated workers to file their claims before the COA, which subsequently issued a decision in 2019 approving the release of their claims.