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5 councilors ask bank to deny electric coop's P3M loan |
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Source Sheila E. Covarrubias
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Saturday, 18 August 2007 |
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FIVE members of the City Council led by Councilor Asbi Edding asked the Security Bank Corporation to deny the P300 million loan application filed by the Zamboanga City Electric Cooperative (Zamcelco) on grounds of lack of necessity and lack of consultation with member-consumers.
In a letter addressed to the president of the Security Bank based in Makati City, Councilor Edding, with colleagues Cesar Iturralde, Melchor Rey Sadain, Luis Biel III and John Dalipe, cited five reasons in objecting to the cooperative's P300 million loan application recently filed with the bank.
"We are filing this objection in our capacity as representatives of the consumers in the City Council and as members of Zamcelco," the councilors declared in a letter dated August 14 and coursed through the Security Bank Corporation Manager in Veterans Avenue.
The councilors claimed there is serious doubt as to the existence of the unpaid power bills contracted or purchased by the cooperative from the National Power Corporation during the months of September to November 2006. "Zamcelco did not submit any proof, such as contract with Napocor to purchase power and billing document to support its claim of alleged unpaid power bills amounting to P300 million."
The audit results conducted by the National Electrification Administration (NEA), which hinted that the cooperative may avail loan with the Development Bank of the Philippines to purchase power "does constitute as legal basis for the availment of the P300 million loan from the Security Bank," the councilors said.
They stressed that NEA even condoned the P144 million obligation of Zamcelco two years ago, thus, "it is illogical and unthinkable for NEA to recommend to the Zamcelco to borrow P300 million from the Security Bank."
It is also of public knowledge, the 5 councilors claimed, that Napocor has "failed in the privatization of its assets" and that foreign lending institutions have stopped granting loans to the corporation.
"There is well grounded basis to object to the availment of the loan involuntarily negotiated by Zamcelco with the Security Bank because this loan is just a pretext to pay the non-existing obligation of Zamcelco as a way to help Napocor," they stressed.
The granting of the P300 million, they said, will inevitably result in increase of electrics rates prejudicing the consumers and that if City Council members support such plan, "they will be estopped from questioning it later".
On the other hand, they said, the cooperative officials claim the cooperative is financially sound, thus, there is no compelling reason to negotiate loan at this time. "As a matter of fact, Zamcelco claims that the capital expenditures it intends to undertake in the future, which are pending approval before the Energy Regulatory Commission, can be implemented without availing of a loan to finance them."
According to the councilors, three top officials of the cooperative have cited the need to avail of the loan to pay the Napocor the unpaid power bills for the months of September, October, and November 2006 in the presence of Security Bank representatives during a hearing conducted by the Council committee on energy on July 19.
However, the Zamcelco general manager informed the City Council during its regular session last August 9 that the P300 million would be used to pay the accumulated system losses incurred by the cooperative the past years and that the balance would be deposited in the coop's current account.
"We cannot ascertain whose manifestation to justify the P300 million loan is correct. It's either the three Zamcelco officials who are correct or the general manager. But one of them is certain to have made a misleading and untruthful justification to the members of the City Council," the councilors pointed out. (Sheila E. Covarrubias)
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