THE Baguio City Government wants the management of Katimex Energy Philippines to first comply with its contractual obligations pursuant to the 25-year memorandum of agreement for the maintenance and operation of the city-owned Asin minihydro power plants.
Mayor Mauricio Domogan said the best thing Kaltimex can do is to review the confirmed contract and understand its obligations for the maintenance and operation of the city-owned power plants and not to look for certain excuses that will delay their compliance to the said contract.
Under the confirmed agreement, Kaltimex is obliged to post a performance bond amounting to P150 million, which is equivalent to 30 percent of the total rehabilitation cost of the power plants.
Kaltimex is also obliged to pay to the local government its first year rental amounting to P18 million within six months from the confirmation of the agreement.
The local chief executive called on Kaltimex management to fix their performance bond which was coursed through a bonding corporation whose address cannot be located in Manila to restore the trust and confidence of city officials to the sincerity of the company in implementing the maintenance and operation of the city-owned power plants.
Further, he called on Kaltimex management to also issue the necessary special power of attorney to Rodrigo Cabrera, their alleged consultant, so that he will have the personality to represent the company in talking to city officials regarding important issues and concerns on how the company will implement the provisions of the agreement to make the city-owned power plants operational.
He admitted he is beginning to doubt the sincerity of Kaltimex officials in dealing with the local government, especially in complying with the provisions of the confirmed agreement so that the power plants will be operational within the next three years pursuant to the agreement.
Baguio City owns the distinction of owning renewable energy plants which was turned over to the local government by the Americans after leaving the city.
Domogan appreciated the earlier commitment of Kaltimex it will comply with its obligations under the agreement but he again received a separate communication from the company stating among others imposing certain conditions and requesting the deferment of the payment of its first year rental due to alleged failure of the local government to peacefully turnover the property to the company.
The mayor explained he is confused on the conflicting contents of the separate letters sent by Kaltimex to the city over the past several weeks.
Domogan also wanted to make sure on what is the company’s stand whether it is still interested to pursue the agreement for it to maintain and make operational the minihydro power plants within the agreed 3-year period.
In 2012, the operation of the Asin minihydro power plants was stopped by the Energy Regulatory Commission after the local government failed to secure the required certificate of compliance from the regulatory body for its continuous operation.
The city was constrained to bid out the maintenance and operation of the power plants until the Special Bids and Awards Committee awarded to kaltimex the right to maintain and operate the plants for a 25-year period. (PR)