The Manila Electric Co. (Meralco) may pursue legal action against the South Cotabato II Electric Cooperative (Socoteco II) following the rejection of its bid to partner with the nonprofit distribution utility, which favored a competing offer from Ignite Power.
‘We may file a case against them. We are studying our legal options. We wrote them a letter objecting to the illegal direct award, manifest partiality to Ignite Power and lack of transparency,’ Meralco Senior Vice president Arnel Paciano Casanova said Monday.
There was no reply from Socoteco II, he added.
The member consumer owners (MCOs) of Socoteco II reportedly threw their full support behind to a proposed joint venture with the Razon-Pacquiao-backed Ignite Power Ignite during Socoteco II’s 43rd Annual General Membership Assembly last Saturday.
Casanova said the process by which the deal was approved is ‘devoid of transparency and fraught with deception and coercion’ of the MCOs who were made to vote on a deal that were never even disclosed or explained to them. ‘It is a sham proceeding in violation of the law.’
He likened the process as ‘a scripted event’ that violated public bidding laws and suppressed opposition, neglecting the best interests of the consumers.
‘Opposition and objections were stifled in a proceeding that resembles a scripted telenovela. The award was in violation of existing laws on public bidding and competitive selection where the MCOs should have been given a choice that was best for the interest of the consumers.’
Ignite Power President Roel Castro, however, said this still requires approval through a plebiscite among cooperative members and the issuance of guidelines by the National Electrification Administration (NEA).
‘Though there was an adoption of resolutions during the AGMA, the CJVA [conditional joint venture agreement] has to be approved by the majority of the member-consumer-owners. This is the only time we can say that the agreement is approved for execution. Its still a long way. There will still be the franchise approval, ERC’s [Energy Regulatory Commission] issuance of the CPCN [certificate of public convenience and necessity] and clearance by NEA and PCC [Philippine Competition Commission],’ said Castro.
He added that the company is ready to pour in billions of pesos to finance the rehabilitation and modernization of Socoteco II’s facility.
‘If we are to follow the capex [capital expenditure] catch-up plan developed by Socoteco II and supervised by NEA, it needs around P10 billion in the next five years. That’s just for Socoteco II to catch up with their capex plan,’ Castro said.