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Olongapo warned of power cutoff over city’s P5-B debt


OLONGAPO CITY—The state-run Power Sector Assets and Liabilities Management Corp. (Psalm) has issued a final disconnection notice to the city government for its failure to pay over P5 billion in debts.

Emmanuel Ledesma Jr., Psalm president and chief executive officer, wrote outgoing Mayor James Gordon Jr. and the city council on June 18 to inform them that the city government has until June 25 to settle obligations that had gone up to P5.082 billion as of May 31 before it cuts off Olongapo’s power supply.

The city’s debt included the accumulated arrears of the police, public schools and other facilities administered by national government agencies, said Ferdinand Magrata, city administrator, in an earlier statement.

But Magrata said the city government is questioning the debt computations provided by Psalm because the Electric Power Industry Reform Act of 2001 had condoned some of the financial obligations that used to burden local governments.

The city council is holding a special session today to review a debt restructuring agreement signed by Gordon and Psalm, according to an Inquirer source who asked not to be identified for lack of authority to talk to reporters.

Gordon said the city would fulfill its obligations to Psalm.

“I have also written [Vice Mayor Rolen Paulino, the incoming mayor,] to urge him to support the restructuring of the power debt for the sake of the city,” he said.

City officials said the Olongapo government would raise the money to settle a portion of the debt from the sale of the Public Utility Department (PUD), which used to distribute electricity in the city.

PUD was sold for P610 million to the Olongapo Electricity Distribution

Co. Inc., which was given a 25-year franchise to take over the city government-run power distributor.

Records showed that the council has allocated P500 million from the profits from the PUD sale to settle a portion of the city’s debt to Psalm. At least P50 million has been set aside for retiring PUD workers and another P60 million to pay Olongapo’s debts to the San Miguel Energy Corp.  Robert Gonzaga, Inquirer Central Luzon


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Tags: Electricity , Energy , local government debts , News , Power Sector Assets and Liabilities Management Corp. , Regions




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