Baguio, Kaltimex to fix MOA over Asin hydros; landowners’ pay eyed

CITY HALL BEAT

Aileen P. Refuerzo

BAGUIO CITY – The city government and the Kaltimex Energy Philippines Inc. are poised to forge a compromise agreement that would settle the court case for the rescission of the latter’s contract for the rehabilitation and operation of the Asin mini-hydro power plants.

Engineer Bonifacio Dela Peña reported to the management committee meeting led by Mayor Benjamin Magalong Dec. 3 that they are now finalizing terms of the accord which will set the amount to be paid by Kaltimex as “liquidated damages” and the grace period the city will give the company to make the plant operational.

Kaltimex won the bid for the rehabilitation, upgrading, expansion, operation and management of the three mini-hydropower plants of the city located in Asin, Tuba, Benguet and entered into a memorandum of agreement with the city on Jan. 30, 2015 which was confirmed by the city council on Feb. 9, 2017.

It however unable to comply with its contractual obligations under the MOA as it failed to start the implementation of the project and later refused to heed the succeeding demand letters of the city to remit its monetary obligations then computed as P68.1 million thus prompting the city to file a civil case for the cancellation of the contract with damages.

 Last August, Kaltimex Energy Philippines executive president engineer Jurist Awal served to the new city leaders their intent to pursue the project with an offer to pay part of its computed obligation in exchange for the withdrawal of the case.

As per the draft compromise agreement, Kaltimex will pay the city P13,633,500 as liquidated damages and will reimburse the filing fee incurred by the city in Civil Case No. 8957-R.

It will also replace and update its performance bond of P150 million with a new bond.

Kaltimex will also take physical possession of the plants and will be given four months to make them operational.

Last Thursday however, the city received a letter from the company requesting to extend the period to five months.  

The draft accord further stipulates that the city government will withdraw the case upon the company’s payment of the damages and filing free.

Kaltimex will also be bound to “faithfully comply and abide with the terms and conditions of the compromise agreement as well as the MOA dated Jan, 30, 2015.

Its failure or refusal to comply will entitle the city to “extrajudicially terminate” the MOA, to file appropriate court cases and to forfeit the performance bond in its favor.

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 The city government is working out the release of the compensation for Tuba town residents whose lands were affected by the city-owned mini-hydroelectric plants in Tadiangan and Nangalisan barangays.

Dela Peña told the management committee led by Mayor Benjamin Magalong Dec. 3 that he had met with the members of the Tadiangan-Nangalisan Hydro Ancestral Landowners Association (TNHALA) to facilitate the release of the long delayed compensation which serves as the city’s rental payment for their properties traversed by the plants’ operations.   

City Accountant Antonio Tabin said the amount totaling P2.7 million representing rental fees from 2007 to October 2012 when the city’s operations ceased had long ago been set aside but put on hold pending resolution of issues on the court case between the city and the landowners and on the list of qualified beneficiaries of the compensation.

Former mayor Mauricio Domogan who worked out the compromise agreement with the TNHALA approved by the Regional Trial Court in 2010 helped the landowners to comply with a provision in the agreement for the lot owners to first settle the case filed by the city government for the disruption of the water supply to the facilities by securing a waiver of claims for damages from the city council.

It took years however for the city government to convince the Commission on Audit to allow the city council to issue the waiver of claims and in 2017, the city council approved a resolution relinquishing the city’s claims for damages amounting to P2.09 million.

The release of the payment however remained on hold as the claimants failed to resolve issues on who the qualified beneficiaries are.

The last agreement with the former mayor was that the city and the landowners will conduct a validation survey to identify the legitimate landowners whose properties are traversed by the plants’ operations after which, the residents will designate from their ranks who will receive the share for distribution to the landowners.

Dela Peña said that in their last meeting, it was agreed that the TNHALA will receive the check payment.

City Legal Officer Melchor Carlos Rabanes said an undertaking has to be executed for the payment in compliance with the compromise agreement forged.