By Beatriz Marie D. Cruz, Reporter
LAWMAKERS on Wednesday slammed the privately-owned National Grid Corp. of the Philippines (NGCP) for failing to make sufficient and prompt investments to upgrade the country’s’ power transmission network while reporting high dividends.
Speaking at a joint Senate hearing, NGCP Assistant Corporate Secretary Ronald Dylan P. Concepcion said the corporation had a net income of P20.3 billion in 2019, with P15 billion kept as dividends.
“So 75% goes to dividends. This is what I’m talking about. This is what I’ve been saying early on, that a bigger share goes to dividends instead of the development (of the national grid),” Senator Rafael T. Tulfo, who presided the hearing, said in mixed English and Filipino.
“It is only in the Philippines that transmission is for profit,” Mr. Tulfo said. “This is the reason why we are experiencing brownouts and other problems because there aren’t enough development activities.”
NGCP was awarded the contract to operate, maintain, and develop the state-owned power grid in 2009.
Mr. Concepcion explained that the NGCP in 2019 used P39 billion of its capital outlay and expenditures for the development of the transmission system.
He added that in 2017, the NGCP incurred a P20.6-billion net income, where P19 billion went to dividends. In 2014, its net income was P22 billion, with P24 billion allotted to dividends.
NGCP spokesperson Cynthia P. Alabanza said in the same hearing that the company’s “profits or dividends are taken from retained earnings… (it) does not necessarily come solely from the profits earned for that particular year (and they were) accumulated over the years.”
Dividends are profits paid to a company’s shareholders.
NGCP is 60% owned by Filipino companies Monte Oro Grid Resources Corp. and Calaca High Power Corporation, while the remaining 40% shares are held by the State Grid Corp. of China (SGCC).
Senators are looking to bar foreigners from having shares in the NGCP, noting that the Chinese government-owned SGCC presents a security risk amid increasing maritime tensions between the Philippines and China in the South China Sea.
Ms. Alabanza clarified that only four Chinese nationals are part of the NGCP and are not involved in the management of the corporation.
“From the beginning they’ve only exercised an advisory capacity or as members of the board,” she said, noting that three out of the four Chinese nationals are currently in the Philippines.
She also explained that the NGCP has a “standalone” operating system that controls the transmission network, which is not connected to the internet or rely on telecommunication companies.
“The NGCP has its own system of communications between our substations, (and) we don’t rely on Globe, Converge or Smart for our internet,” she said, noting this protects the transmission network from external threats.
Energy Undersecretary Sharon S. Garin said their department has asked for an audit of the NGCP, but the company asserted that only the Energy Regulatory Commission (ERC) has this authority as provided under its franchise and concession agreement.
ERC Chairperson Monalisa C. Dimalanta told the committee that the NGCP has 72 delayed projects.
Of these, 33 are in Luzon, 19 in the Visayas, and 14 in Mindanao. The tally also includes six delayed “Energy Projects of National Significance.”
The NGCP officials apologized for the delayed projects.
Senator Ana Theresia “Risa” N. Hontiveros-Baraquel said NGCP’s ownership structure and performance raises red flags.
“The issue here is trust and confidence… in terms of national security and poor performance in completing the numerous projects, including the backbone projects indicated in the DoE-approved (Department of Energy) transmission development plan,” she told reporters after the hearing.