Clearing up Kaltimex issue over Asin hydros
>> Wednesday, July 21, 2021
EDITORIAL
The Baguio City Council met
Monday with city executive officials to thresh out several issues arising from
the request of Mayor Benjamin Magalong to confirm the termination of the
contract between the city government and Kaltimex Energy Philippines Inc. over
the mothballed development of the Asin hydros in Tuba, Benguet which the city
government claims as it own.
Councilor Betty Lourdes Tabanda apprised Magalong, City Administrator Bonifacio dela Pena, and OIC City Legal Officer Richard Dayag about the council’s action on the possible termination of the Kaltimex contract.
During the regular session on January 24, the city council required the company to submit conclusive documents to convince the legislators that the company has the capability to rehabilitate and operate the three mini-hydropower plants, said a report by city council staff Jordan Habbiling.
In response to the council’s request, Kaltimex submitted a letter of intent to continue the contract, proof of financial capability of P1.2 billion from Landbank Bukidnon Lending Center, initial timetable for six months, program of works including a detailed cost for a new Plant 1 HEP, and an updated company profile with the Security and Exchange Commission registration.
The city council’s committee on human rights and justice chaired by Tabanda referred the documents to the City Administrator, City Engineering Office, City Building and Architecture Office, General Service Office, and local finance Committee for evaluation.
“We forwarded these documents to concerned offices as I don’t think the council members are technically competent to review them,” Tabanda said.
She said the action of the council was part of due process.
To date, the committee has yet to receive the requested reports from the concerned executive offices.
Magalong and dela Pena explained the executive department had decided it would not evaluate the company’s capability to operate the hydro power plants but would stand firm with its contention that the company violated the compromise agreement, thus the nonresponse of the executive offices to the council’s request for evaluation.
In 2018, the city government under the administration of then Mayor Mauricio Domogan, sued Kaltimex due to the latter’s failure to fulfill its obligations.
However, a compromise agreement was signed in February 2020 between the city government under the current administration and Kaltimex.
As part of the agreement, Kaltimex paid the liquidated damages worth P13.6 million and reimbursed the city government’s filing fee of P605,000.
Upon the court’s approval of the compromise agreement, the city government issued Kaltimex a Notice to Proceed in February 2020.
However, the company once again failed to pursue the project.
The company likewise failed to replace and update its performance bond of P150 million pesos with a new bond as contained in Item 4 of the compromise agreement.
In his letter dated Oct. 19, 2020, Mayor Magalong requested the council to enact a resolution confirming the termination of the contract.
The mayor Magalong wrote to the council on Jan. 19 and June 11 this year reiterating his request.
Pressed for time, the committee filed a resolution confirming the termination or rescission of the contract. The resolution, however, was held in abeyance due to the request of Vice Mayor Faustino Olowan for an executive-legislative meeting in order to thresh out legal issues.
Olowan said the city council was one with the executive department in its move to rescind the contract with Kaltimex. But the city government must exercise prudence with its decision regarding this issue taking into account legal implications that may arise in the future.
As the city government is discussing how to make productive the Asin hydros, the question being asked by Tuba folks and officials of the town is why they are being left out of the talks considering the hydros fall within ancestral lands of indigenous peoples of the municipality.
Records from the Tuba Municipal Government also bared the Baguio City government doesn’t own any piece of land in Tuba.
Councilor Betty Lourdes Tabanda apprised Magalong, City Administrator Bonifacio dela Pena, and OIC City Legal Officer Richard Dayag about the council’s action on the possible termination of the Kaltimex contract.
During the regular session on January 24, the city council required the company to submit conclusive documents to convince the legislators that the company has the capability to rehabilitate and operate the three mini-hydropower plants, said a report by city council staff Jordan Habbiling.
In response to the council’s request, Kaltimex submitted a letter of intent to continue the contract, proof of financial capability of P1.2 billion from Landbank Bukidnon Lending Center, initial timetable for six months, program of works including a detailed cost for a new Plant 1 HEP, and an updated company profile with the Security and Exchange Commission registration.
The city council’s committee on human rights and justice chaired by Tabanda referred the documents to the City Administrator, City Engineering Office, City Building and Architecture Office, General Service Office, and local finance Committee for evaluation.
“We forwarded these documents to concerned offices as I don’t think the council members are technically competent to review them,” Tabanda said.
She said the action of the council was part of due process.
To date, the committee has yet to receive the requested reports from the concerned executive offices.
Magalong and dela Pena explained the executive department had decided it would not evaluate the company’s capability to operate the hydro power plants but would stand firm with its contention that the company violated the compromise agreement, thus the nonresponse of the executive offices to the council’s request for evaluation.
In 2018, the city government under the administration of then Mayor Mauricio Domogan, sued Kaltimex due to the latter’s failure to fulfill its obligations.
However, a compromise agreement was signed in February 2020 between the city government under the current administration and Kaltimex.
As part of the agreement, Kaltimex paid the liquidated damages worth P13.6 million and reimbursed the city government’s filing fee of P605,000.
Upon the court’s approval of the compromise agreement, the city government issued Kaltimex a Notice to Proceed in February 2020.
However, the company once again failed to pursue the project.
The company likewise failed to replace and update its performance bond of P150 million pesos with a new bond as contained in Item 4 of the compromise agreement.
In his letter dated Oct. 19, 2020, Mayor Magalong requested the council to enact a resolution confirming the termination of the contract.
The mayor Magalong wrote to the council on Jan. 19 and June 11 this year reiterating his request.
Pressed for time, the committee filed a resolution confirming the termination or rescission of the contract. The resolution, however, was held in abeyance due to the request of Vice Mayor Faustino Olowan for an executive-legislative meeting in order to thresh out legal issues.
Olowan said the city council was one with the executive department in its move to rescind the contract with Kaltimex. But the city government must exercise prudence with its decision regarding this issue taking into account legal implications that may arise in the future.
As the city government is discussing how to make productive the Asin hydros, the question being asked by Tuba folks and officials of the town is why they are being left out of the talks considering the hydros fall within ancestral lands of indigenous peoples of the municipality.
Records from the Tuba Municipal Government also bared the Baguio City government doesn’t own any piece of land in Tuba.
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