PSALM to face plunder raps

San Miguel Corp. is readying plunder charges this week against the management of Power Sector Assets Management Corp. for alleged fraud in the contract of the Sual coal-fired power plant in Pangasinan, the company’s top executive said Monday.

San Miguel president Ramon Ang said San Miguel Energy Corp., a unit of San Miguel which won the contract to manage the output of Sual plant in 2009, was being asked by PSALM to pay for 1,200-megawatt capacity of the facility, when the plant’s actual output was only 1,000 MW.

“This week, we will file plunder case against PSALM for Sual because… it cost so much damage for the Philippine government. I will file it with the DoJ [Department of Justice],” San Miguel president Ramon Ang told reporters.

Ang said San Miguel had consulted its legal team who claimed PSALM’s actions qualified as plunder.

“We wrote them [PSALM] a legal demand one year ago and told them that it is not legal. We will take legal action and since we are not talking, it’s about time,” Ang said.

PSALM, which terminated a contract of a unit of San Miguel over the management of another power facility—the Ilijan power plant in Batangas, has yet to respond to the new accusation of San Miguel.

Ang said while the conglomerate’s energy arm paid for the operations and maintenance expenses of the Sual power plant, the company enjoyed less than 100 percent of the contracted output.

“The contract of the government, of PSALM, when the plant was put up was 1,000 megawatts. Then some time after GMA [President Gloria Macapagal Arroyo] left in 2009, the one who put up the plant [Team Energy] said the plant is now at 1,200 MW, when it is only at 1,000 MW,” Ang told reporters.

San Miguel Energy offered PSALM $1.072 billion to manage and sell the output of the Sual power plant during the privatization process in August 2009.

“So there was a dispute because they were asking us to pay for 1,200 MW when it’s only 1,000 MW. That’s illegal and we will sue PSALM for that. At the last minute, they changed it to 1,200 MW,” Ang said.

Sual was built by Team Energy, a joint venture between Marubeni Corp. and Tokyo Electric Power Corp.

San Miguel Energy said prior to the privatization of the Sual independent power producer administrator contract, PSALM and Team Energy, the builder of the plant, signed a memorandum of agreement covering the Sual power plant’s excess capacity.

When the output of the plant was bidded out, PSALM imposed the same agreement on San Miguel Energy as the IPP administrator. Starting November 2009, Team Energy used the agreement as basis to claim payments for excess generation from San Miguel Energy.

San Miguel Energy said if there was any excess capacity from the Sual plant, it should be the government who should benefit and not the IPP of the plant.

The company has a pending request with PSALM to review the legality of the agreement with TeaM Energy.

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