DOE officials ready to face graft case

Energy Secretary Alfonso Cusi and Philippine National Oil Co. (PNOC) chairman Reuben Lista are ready to face the graft charges filed against them by businessman Gregorio Araneta III.

The case involves the $1.2 billion Energy City project of Araneta’s Energy Oil and Gas Holdings Inc. (EOGHI).

The energy officials maintained that there was no agreement signed between EOGHI and PNOC Alternative Fuels Corp. after years of negotiations.

According to a PNOC fact sheet sent to The STAR, the only existing contract between EOGHI and PAFC is the signed memorandum of agreement (MOA) entered into on June 19, 2014, which supposedly expired on June 19, 2015.

They said the PNOC board is not bound by the decision of the PAFC board to approve an agreement or contract.

Therefore, even if the PACF board approved the lease agreement, it still had to be approved by the PNOC board to become a binding agreement.

After the expiration of the June 2014 MOA, PNOC still entertained negotiations with EOGHI, and was still in the negotiation phase over the terms of a lease agreement even years after PAFC underwent dissolution and was absorbed by PNOC.

“The terms of EOGHI’s offer in the lease agreement did not comply with the standards expected of a government contract. EOGHI’s changing and decreasing offers for the rental rate were bclearly unacceptable. Therefore, PNOC is sufficiently justified in disapproving the proposal and in subsequently terminating the negotiations with EOGHI,” PNOC said.

PNOC said the proposed lease rate was way below the fair rental value of the property which was P78 per square meter per annum at that time.

“EOGHI made an initial offer of P63 per sqm per annum which was later lowered to only P39 per sqm per annum chargeable against the alleged lease rental paid in consideration of the MOA,” PNOC said.