Meralco
There is something more than meets the eye in the recent controversy wherein the GSIS seems to be seeking control of the electric company.
Meralco is the Manila Electric and Light Company, a Lopez-managed electric distribution company in Manila. GSIS is the Government Service Insurance System headed by Malacañang-appointed President Winston Garcia. GSIS claims that it controls some fifty-three percent of the stockholdings of Meralco while the Lopez family owns about only fifteen-percent and the rest are controlled by private shareholders.
GSIS is saber-rattling by questioning certain over-charges which the Meralco management imposed upon the electric consumers and which Meralco should refund to the public. GSIS claims that the refund could easily amount to billions of pesos which should come in forms of rebates or deduction to the bills that the Meralco consumers should pay.
GSIS further claims that the real electric rates should be lower than what Meralco presently charges. And there seems to be some truth to the claims of GSIS.
On the other hand, Meralco claims that there are really no over-charges to be refunded and that electricity rates are very high because National Power Corporation (NAPOCOR), a government owned power-generation company sells very high rates of electricity to Meralco as compared to the rates sold by Independent Power Producers (IPPs). And there seems to be some truth also to the claims of Meralco.
This growing controversy between GSIS and Meralco, if handled well, would result not only to lower electricity rates but also to the refund of the over-charges and both would benefit greatly the electric consumers. This could also start a review of all electricity rates of the power supplied by NAPOCOR to power-distribution companies like CEPALCO and MORESCO of Cagayan de Oro and Misamis Oriental or of VECO of Cebu. If the recent newspaper ads are true, then it cannot be denied that NAPOCOR really sells almost double the price of electricity it generates compared to the IPP rates. The big question is why could small independent power producers, which are private firms, produce and generate electricity at half the cost of what NAPOCOR can. Certainly, corruption and abuse by government officers managing NAPOCOR increase the rates beyond what ordinary business can provide. It is well to remember the 94 Vice-presidents of NAPOCOR that became a big issue some ten years ago in which its Vice-president was provided with a Mitsubishi Pajero and huge salaries and incentives.
And now GSIS is threatening to assert its managerial control of Meralco claiming that is has more than fifty-percent of the voting shares of stocks. This is a very bad omen for the people. It means that government men would wrest control of Meralco and take it away from the private sector and oust the Lopez family.
It is a very dangerous scenario when even public utilities like Meralco are sought to be controlled by government functionaries who are holding government high positions because of there political clout and not because of their managerial expertise, skills, training or experience.
The move of GSIS to take control of Meralco runs contrary to the Privatization Law which resulted to the sale of government- controlled corporations like Philippine Airlines, Philippine National Bank, Metropolitan Waterworks and Sewerage System and Petron to the private sector. Not only was corruption curtailed but it also resulted to the business revival of PAL and PNB which where then on the brink of financial collapse. Now PAL is flying high and, like PNB, has begun to be profitable and insured the employment of thousands of people.
As the adage goes, if ain’t broke don’t fix it. There is nothing wrong with the management of the Lopezes of Meralco. Thus, there is no reason at all to change management and there is no basis for GSIS to take over the Meralco board.
What should be done is for NAPOCOR to sell electricity at the rates equal to the IPP rates. What should be done also is to force Meralco to refund the overcharges to their power consumers but not to change the management of Meralco.
What should be done is to review the power generation costs of NAPOCOR all over the country and eliminate all excessive salary, allowances and privileges of NAPOCOR executives. There is even need to reduce the number of vice-presidents to five from the almost one hundred vice presidents, and to sell all the Pajero’s and luxury vehicles assigned to NAPOCOR executives.
From what appears to be correct, it is not Meralco that needs fixing but NAPOCOR.
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