Mayor: Nullify contract with firm on Asinhydros
>> Friday, June 18, 2021
BAGUIO CITY – Mayor Benjamin Magalong is
pushing termination of the city government’s contract with Kaltimex Energy
Philippines for the rehabilitation and upgrading of the Asin hydro power plants
because of the company’s alleged failure to comply with its obligations to
implement the project as stipulated in a compromise agreement approved by a
local court.
Magalong directed the city’s local finance committee to prepare estimated losses that the city incurred several years the proposed rehabilitation and upgrading of the power plants had not been implemented despite commitment of Kaltimex to start work of the multi-million project, a city government press release said.
He said initial estimates show the city government lost at P160 million in potential revenue from operation of the power plants since 2012 when the Energy Regulatory Commission (ERC) issued a cease-and-desist order for the city to stop operation of the power plants until it secures a certificate of compliance from the regulatory agency.
The mayor earlier sent a letter to the city council stating among others the city executive department’s intention to terminate its contract with Kaltimex for the latter’s failure to comply with its contractual obligations to start the project based on a court-approved compromise agreement.
Magalong said a second letter will be sent to the city council reiterating the city’s desire to terminate the contract with Kaltimex so the local government can look for a partner that is financially capable to implement upgrading of the century-old power plants.
The power plants are expected to generate electricity for the Luzon grid and provide additional supply of renewable energy
Magalong said the second letter that will be sent to the city council should send a message on the urgency for the body to act on the termination of the city’s contract with Kaltimex because of its failure to start work on the project despite its commitment to do so.
In 2015, the city’s special bids and awards committee (SBAC) declared Kaltimex Energy Philippines as the complying and responsive bidder for rehabilitation and upgrading of the power plants.
The memorandum of agreement between the city and the company was confirmed by the city council in February 2017.
The company requested for time to implement the project because of alleged adjustments and the failure of the same to possess the power plants as it is still under the name of the former operator per records from the energy department.
In 2006, the 25-year contract between the city and the Aboitiz-owned Hydroelectric Development Corp. (HEDCOR) expired that allowed the local government to take over operation and maintenance of the power plants until it was issued a cease-and-desist order by the ERC in October 2012.
Magalong directed the city’s local finance committee to prepare estimated losses that the city incurred several years the proposed rehabilitation and upgrading of the power plants had not been implemented despite commitment of Kaltimex to start work of the multi-million project, a city government press release said.
He said initial estimates show the city government lost at P160 million in potential revenue from operation of the power plants since 2012 when the Energy Regulatory Commission (ERC) issued a cease-and-desist order for the city to stop operation of the power plants until it secures a certificate of compliance from the regulatory agency.
The mayor earlier sent a letter to the city council stating among others the city executive department’s intention to terminate its contract with Kaltimex for the latter’s failure to comply with its contractual obligations to start the project based on a court-approved compromise agreement.
Magalong said a second letter will be sent to the city council reiterating the city’s desire to terminate the contract with Kaltimex so the local government can look for a partner that is financially capable to implement upgrading of the century-old power plants.
The power plants are expected to generate electricity for the Luzon grid and provide additional supply of renewable energy
Magalong said the second letter that will be sent to the city council should send a message on the urgency for the body to act on the termination of the city’s contract with Kaltimex because of its failure to start work on the project despite its commitment to do so.
In 2015, the city’s special bids and awards committee (SBAC) declared Kaltimex Energy Philippines as the complying and responsive bidder for rehabilitation and upgrading of the power plants.
The memorandum of agreement between the city and the company was confirmed by the city council in February 2017.
The company requested for time to implement the project because of alleged adjustments and the failure of the same to possess the power plants as it is still under the name of the former operator per records from the energy department.
In 2006, the 25-year contract between the city and the Aboitiz-owned Hydroelectric Development Corp. (HEDCOR) expired that allowed the local government to take over operation and maintenance of the power plants until it was issued a cease-and-desist order by the ERC in October 2012.
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