In a recent hearing at the Senate Committee on Energy, representatives from the National Grid Corporation of the Philippines (NGCP) reiterated its denial that partners from the State Grid Corporation of China (SGCC) have total control over their operations.
The Energy Committee, chaired by Sen. Raffy Tulfo, questioned if the China-based corporation, who owns 40% of the NGCP, can derail operations based on their positions in the board. NGCP’s Corporate Communications Head, Atty. Cynthia Alabanza clarified that only four of their corporation’s 10-person board are Chinese and cannot strong-arm any decisions. She also stressed that the rest of the board and all other employees and staff of the NGCP are Filipino.
Senators Tulfo and Sherwin Gatchalian then raised concerns about how a certain provision in NGCP’s bylaws disallows the board to convene without the presence of any of the Chinese stakeholders. Alabanza countered that the provision is a simple courtesy to the partners that can only be invoked twice and insisted that the rest of the Filipino board still has more control. “As regards the concerns raised by Senators Gatchalian and Tulfo on the ability of the Chinese shareholders to defeat the will of the Filipino Board, this fear is not only speculative, it is without basis,” she emphasized. “At best, the minority shareholders can delay convening the board, but the board cannot be held hostage indefinitely. Any urgent matter that needs immediate attention can be decided on by the President and CEO, a Filipino. If needed, this may later be ratified by the board,” she continued.
NGCP also highlighted that the 40% stake of SGCC is constitutionally allowed and necessary because the Philippines did not have any local bidders that are capable of meeting the technical requirements for what the NGCP needs to achieve. It can be recalled that the NGCP took over operations from National Transmission Corporation (TransCo) when the government mandated that grid operations be privatized. SGCC participated and won the open bid to become the foreign technical partner who has the experience and expertise required by Electric Power Industry Reform Act (EPIRA).
“Our foreign technical experts in the past were engaged by NGCP in full compliance with all [Philippine] laws. They provided technical assistance and advice. None of them was an ‘executive’ or ‘managing’ officer of the company,” Alabanza reiterated.
Senator Tulfo also accused the NGCP of “underspending” or not allocating enough budget for service improvements. NGCP was quick to reply that they have invested more than PhP300 billion since 2009 and have far outspent the government in terms of transmission infrastructure investments. “We remain committed to addressing all energy industry challenges, insofar as transmission is concerned, and we continue to pledge our cooperation and devotion to finding holistic and long-term solutions,” Alabanza concluded.
