Concerns raised over leadership vacuum in DOE, PSALM

The “big boys” in the country’s energy sector are raising concerns over a leadership vacuum in the industry with the resignation of Energy Secretary Carlos Jericho Petilla and the suspension of PSALM president and CEO Emmanuel Ledesma Jr.

The Power Sector Assets and Liabilities Management Corp. (PSALM) is the government entity tasked to privatize stateowned power assets.

They said that with Petilla’s resignation and the appointment of the next Energy chief still in limbo, the power generation business could be affected.

In an interview with The STAR, AboitizPower chief executive officer Erramon Aboitiz said the resignation of Petilla brings about uncertainties, while the suspension of Ledesma would definitely slow down the government’s privatization efforts.

“Unfortunately, things will slow down. It’s not good for the industry but we’ll see. PSALM for example, is there a confirmed OIC?” Aboitiz said, referring to Ledesma’s suspension. He said the decision seemed abrupt. The Department of Finance (DOF) announced in early May that Ledesma has been suspended by the PSALM Board, citing the findings of the Governance Commission for Government Owned and Controlled Corporations.

The DOF has appointed Lourdes Alzona, PSALM vice president for Finance as officer-in-charge.

The DOF did not reveal the commission’s findings, but sources said several anomalous transactions in the privatization process served as basis for Ledesma’s suspension.

Reacting to his suspension, Ledesma said it is not the PSALM Board but the Office of the President that has the proper authority to conduct an investigation and issue the corresponding preventive suspension order on him because he is a presidential appointee.

“The PSALM Board has no authority to do so,” according to Ledesma.

Similarly, in a separate interview with The STAR, Tomas Alcantara, chairman of the Alcantara Group, a major power player in Mindanao, echoed the same sentiment.

“There are a lot of uncertainties. Without a president and CEO (in PSALM), you can hardly move,” he said.

He said the leadership vacuum at PSALM would definitely slow things down.

“This would cripple the privatization of the Energy sector. It better be resolved soon. Decisions cannot be made by just an OIC,” Alcantara said.

Alan Ortiz, president and chief operating officer of SMC Global Power Holdings Corp., the energy arm of San Miguel Corp. (SMC) also raised concerns on the resignation of Petilla and the suspension of Ledesma.

Petilla announced his resignation on April 29. It was supposed to take effect on April 30 but President Aquino has asked him to stay until a replacement has been named.

The three companies that have raised concerns are among the biggest Filipino- owned energy players in the country.

The Cebu-based Aboitiz Group, through its power generation arm AboitizPower, for instance, is a major player in Luzon, Visayas and Mindanao.

According to data from the company, its total attributable