http://www.manilatimes.net/national/2006/mar/21/yehey/opinion/20060321opi2.html

David de Montaigne, a British investor, visited the Philippines and fell in love with our country right away. He also fell in love with a Cebuana nurse, to whom he is now married and with whom he now has a family. Being a Cebuano and a Boholano, this was how I came across David’s plight.

Amid soaring world crude oil prices and with his credentials in energy development, David put up a Philippine company, Sukhin Energy Inc. (SEI), to help bring in foreign capital and new technology needed to harness our vast but largely untapped renewable sources of cleaner and more efficient energy.

SEI forged an agreement with the Philippine National Oil Co. (PNOC) and the National Power Corp. (Napocor) for a pioneering joint venture that would develop and supply sustainable biomass gas, using patented new technology, equipment and methods perfected in the Ukraine.

The project meant to use coconut husks and rice hulls that are readily convertible into fuel. The gas was initially meant to fuel a new power plant in Masbate.

Why Masbate of all places? Because up to now, believe it or not, almost 50 percent of the island province still do not have electricity, with the other half, that has electricity, running on a costly and inefficient diesel-fed power barge that has been contributing to Napocor’s huge financial losses.

Besides supplying power to all of Masbate, the project would provide alternative means of income to thousands of growers and farm workers because they would have a lucrative new market for their plant matter waste.

Under the joint-venture terms, neither PNOC or Napocor would spend a single cen­tavo for the project. In fact, SEI spent everything to have the project readied, including the trip of PNOC and Napocor officials to the Ukraine that was meant to familiarize them with the new gasification technology.

SEI had also readied an initial $61 million in private-equity funding from California for the development of biomass energy in the country, to include the Masbate project.

The barangays involved had been “socially prepared” for the project which was all set for implementation until some not-so-honorable but well-connected government officials suddenly became very interested in the biomass project and apparently wanted it for themselves.

As if on cue, PNOC and Napocor unilaterally abandoned their joint venture with SEI. And PNOC, led by its president, Eduardo Mañalac, now appears hell-bent on forging a new joint venture with a favored third party.

A fellow Cebuano, Rep. Eduardo Gullas, had this to say about the alleged misconduct of Mañalac and other energy officials, when they reneged on the agreement with SEI: “Any irregularities by PNOC and Napocor in their transactions with the private sector will reflect negatively on the Philippine government.”

“Investors deal with PNOC and Napocor with absolute confidence. These investors believe that since they are dealing with state-owned entities, they [investors] are also effectively dealing with the Philippine government.”

I could not agree more. In fact, under pain of criminal sanctions, the Antigraft and Corrupt Practices Act specifically forbids officials, including executives of state-owned entities, to favor one private corporation over another, and to enter into transactions disadvantageous to the government.

What is grossly detrimental to the government about PNOC’s proposed new agreement with a third party?

After scrutinizing the draft agreement with the third party, I learned that: 1) While PNOC would not spend a single centavo in the deal with SEI, the state-owned energy developer would shell out $1.5 million (P76.5 million) in working capital under the agreement with the third party; 2) While in the deal with SEI the initial equipment from the Ukraine would be valued at $1.6 million, the same equipment would be worth $4.5 million under the terms with the third party; and 3) Worse, while PNOC would get a 48-percent equity in the joint venture with SEI, the state-owned energy developer would suffer a considerably diluted 25-percent stake in the deal with the third party.

At the end of the day, it is not SEI that is the biggest loser in this sad story. The biggest losers here are PNOC, Napocor and of course, the government’s alternative energy development program, as well as the drive to attract investors and create new jobs.

As energy officials bear the grave consequences of their indiscretions, the biomass power plant project is now in limbo. And so are the residents and farmers of Masbate.  

How can we expect our people, much more other nationalities, to have faith in our government if people in the government keep screwing Filipinos as well as the investors who want to help Filipinos?

For as long as corruption is initiated, even engineered, by our government and political leaders, by the very people who are supposed to fight it, then we can never win any war against corruption—ever.