Latest Stories

Senate asked to probe NIA privatization deal

MANILA, Philippines—The National Irrigation Administration (NIA) stands to lose some P114 million a year in revenues when it implements a highly questionable contract that privatizes the operations of its Baligatan mini-hydropower plant in Ramon town, Isabela, documents received by the Senate Blue Ribbon Committee have showed.

In their letter complaints, several Isabela irrigators and employees of the NIA-Magat River Integrated Irrigation System (Mariis) called on Senator Teofisto Guingona III, committee chairman, to immediately call for an investigation on the contract stipulating that NIA would hand over to a private company—Maslog 1 Hydropower Corp.—the management and operation of the Baligatan plant.

The complaint said the terms and conditions of the contract were deemed “grossly disadvantageous to the government while unduly benefitting those who will be managing and operating the plant.”

The six-megawatt Baligatan hydropower plant is a key component of NIA-Mariis which irrigates some 7,000 hectares of prime farmlands in Region 2. It produces 30 gigawatt-hours of electricity a year.

It is also one of the major earners in the irrigation system and is estimated to bring in P120 million in power revenues to the NIA.

Among the documents submitted to the committee were a copy of the memorandum of agreement dated June 14, 2012, and a copy of the memorandum of agreement dated April 12, 2012, between NIA and Maslog 1.

Both documents were signed by NIA Administrator Antonio Nangel and Maslog 1 president Diego Picardo.

Nangel could not be reached for comment as of press time on Thursday because he was reportedly attending a National Economic and Development Authority board meeting. His information officer refused to comment on the complaint.

The complaint questioned the urgency and need to put the plant under the management of a private company. It said there was really no need to privatize the operations of the plant.

The complainants said there was adequate funding from the national government for the operation of the entire Magat irrigation system, NIA’s second largest irrigation network.

A total of P30 billion in rehabilitation and repair funds were allocated recently to the NIA for the improvement of irrigation systems including Mariis.

No public bidding

The complaint also alleged that the NIA-Maslog 1 deal was anomalous because there was no board approval for it. NIA officials also allegedly violated the law when it awarded the management and operation contract of the power plant to a private company without public bidding.

At the very least, Maslog 1’s proposal to manage and operate Baligatan should have been subject to a so-called “Swiss challenge” under the Build-Operate-Transfer law and the Renewable Energy Act, the complaint said.

In the contract, NIA will receive five percent of the yearly gross revenues generated out of the operation of the plant which will be fully taken over by Maslog 1. This means NIA will be receiving about P6 million a year as its share in the operations of the power plant.

“Why would NIA agree to receive P6 million a year under the privatization contract when it generates P120 million a year if it operates the plant itself?” the complaint said.

“But what makes the transaction criminal is that the private contractor would just be taking over a fully functional and well-equipped government facility without putting in much in investments, then raking in millions of pesos in revenue. Niluto sa sariling mantika ang NIA, (NIA is being fried in its own lard),” the complaint said.

The complaint also pointed to a supposedly irregular part of the contract that appeared to benefit some NIA officials who are set to retire soon. The provision in Article 2 No. 18 of the contract commits Maslog 1 “to recognize a special purpose company that may be created to operate and maintain the power plant.”

Follow Us

Follow us on Facebook Follow on Twitter Follow on Twitter

Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: Baligatan mini-hydropower plant , National Irrigation Administration (NIA) , Philippines , privatization , Probe , Senate

Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94
  1. Napoles spills beans on Enrile, Estrada, Revilla – De Lima
  2. Opinions split on Napoles turning state witness
  3. Delfin Lee: Blame Pag-Ibig, not me
  4. Plunder complaint filed vs PNP chief, firearms office head over license delivery deal
  5. Cedric Lee’s cohort flies out of PH despite look-out order – De Lima
  6. San Juan cops fail to arrest Cedric Lee
  7. More ‘Yolanda’ bodies found
  8. Gigi Reyes pins blame on aide
  9. Lawyer: Napoles ‘will tell all’
  10. Boy ‘sexually assaulted’ at Indonesia international school
  1. Kim Henares needs a reprimand, says Cayetano
  2. Estrada: Gigi Reyes won’t testify vs JPE
  3. Gigi Reyes pins blame on aide
  4. More legal woes for Cedric Lee
  5. Enrile chief aide back in PH ‘to face charges’
  6. Bernice Lee arrested by NBI team
  7. ‘No real progress in PH if dynasties not dismantled’
  8. Suspect in Vhong Navarro’s mauling wants to turn state witness – De Lima
  9. Henares on Pacquiao bashing: I did not start this
  10. ‘Mom, I love you,’ says text from student on sinking ferry
  1. KL confirms Malaysian Airlines Flight MH370 ended in Indian Ocean
  2. MRT passengers pass the hat for 6-year-old Ashley
  3. Rookie, lady cops lauded for quick response to MOA heist
  4. Malaysia averts another air tragedy; pilot lands troubled plane safely
  5. Revilla says he was joking; Lacson stands by his story
  6. Revilla ‘consulted’ Lacson on how he evaded arrest
  7. Cudia, dismissed for lying, got 99% in conduct
  8. Kim Henares needs a reprimand, says Cayetano
  9. Hammer-wielding robbers cause chaos at Philippines’ Mall of Asia
  10. Ex-PBA player Bryan Gahol dies in road mishap


  • Napoles tags over 100 officials in pork scam – Lacson
  • Vitangcol to sue Czech envoy
  • Senator’s kickback from pork bigger than those of Enrile, Estrada, Revilla – Lacson
  • 43 out of 414 Etihad passengers yet to be found, tested for MERS-CoV – Palace
  • Maid confesses in killing of 2 and stabbing of employer in Laguna
  • Sports

  • San Mig Coffee grinds out win over Alaska to force decider
  • UP nips St. Benilde; Adamson blasts RTU in Filoil women’s caging
  • Kevin Garnett responds to Raptors’ GM F word
  • Albert Pujols hits 500th HR of major league career
  • UST posts twin kill in Filoil pre-season cup opening day
  • Lifestyle

  • Entering the monkhood a rite of passage
  • Haneda International Airport: A destination on its own
  • Wanted: Beauty queen with a heart that beats for the environment
  • Kim Atienza: At home with art and design
  • Life lessons I want to teach my son
  • Entertainment

  • Bollywood Oscars, film stars come to Florida
  • Ex-Fox exec denies allegations in sex abuse suit
  • Kris Aquino backtracks, says Herbert Bautista and her are ‘best friends’
  • Summer preview: Chris Pratt enters a new ‘Galaxy’
  • Bon Jovi helps open low-income housing in US
  • Business

  • SM to rebuild Tacloban hospital
  • PSEi slips after 4-day rally
  • Toyota sells 2.58 million vehicles, outselling GM
  • McDonald’s 1Q profit slips as US sales decline
  • SEC approves SM’s P15B retail bond offer
  • Technology

  • ‘Unlimited’ Internet promos not really limitless; lawmakers call for probe
  • Viber releases new design for iPhone, comes to Blackberry 10 for the first time
  • Engineers create a world of difference
  • Bam Aquino becomes Master Splinter’s son after Wiki hack
  • Mark Caguioa lambasts Ginebra teammates on Twitter
  • Opinion

  • One-dimensional diplomacy: A cost-benefit analysis of Manila’s security deal with Washington
  • No ordinary illness
  • Reforest mountains with fire trees and their kind
  • Day of the Earth
  • When will Chinese firm deliver new coaches?
  • Global Nation

  • Filipinos coming home from Mideast must obtain MERS clearance – DOH
  • US Secret Service in Manila ahead of Obama visit
  • Palace thanks Estrada for successful HK mission
  • Hong Kong accepts PH apology; sanctions also lifted
  • China won’t budge, wants PH gov’t to apologize to HK
  • Marketplace