DOE backs NGCP audit as China eases fears

The Department of Energy (DOE) on Thursday said it supported moves in the Senate  for a security audit and  a legislative inquiry into the operations of the National Grid Corp. of the Philippines (NGCP) amid concerns that China could remotely shut down the national power grid.

In Beijing, the Chinese government dismissed such fears with a spokesperson saying there was no need “to imagine trouble where there is none.”

“The allegation of China’s control over the Philippines’ power grid or threat to the country’s national security is completely groundless,” Geng Shuang, the Chinese foreign ministry spokesperson, said on Wednesday.

Opposition Sen. Risa Hontiveros on Tuesday filed a resolution seeking the audit and the inquiry, citing worrisome statements made last week by Melvin Matibag, president of the state-run National Transmission Corp., that the national grid managed by NGCP could be remotely shut down.

Sen. Sherwin Gatchalian, who supported Hontiveros’ call, on Wednesday said the government could take control of NGCP if national security were threatened by foreign control of the power grid.

Earlier raised by Cusi

“We would like to emphasize that the matter at hand is not something new, and is, in fact, the very same points raised by Secretary Alfonso G. Cusi upon his assumption as head of the department [in 2016],” the DOE said in a statement.

“Given that there are aspects in the existing franchise agreement with the NGCP that seem inimical to the best interests of the national government, and more importantly, the Filipino people, both the DOE and Transco continue to call for, and are fully supportive of the Senate’s interest to take a closer look at the administrative, operational and procedural structures existing within the NGCP,” it said.

The DOE did not specify  the “inimical” features in the franchise agreement between Transco and NGCP. It also declined to comment on the security problems of the power grid, referring inquiries to the National Security Council.

“We consider the Senate hearings as a positive development toward the long overdue and much needed audit of NGCP, as well as the comprehensive reexamination of the franchise agreement, which is part of the presidential directive to review all government contracts that appear to be onerous,” the DOE said.

“These steps would facilitate the introduction of all necessary amendments to uphold our national security and the welfare of our citizens and consumers.”

Presidential spokesperson Salvador Panelo declined to comment on the security concerns, saying that President Duterte had not consulted defense and military officials.

“Since that is a national security matter, I will defer to the position of the Department of National Defense as well as the National Intelligence Coordinating Agency,” he said.

Chinese 40-percent stake

The Chinese government is involved in power transmission in the Philippines through a 40-percent stake in NGCP by the State Grid Corp. of China (SGCC).

NGCP took over the operation and management of the country’s power transmission grid from Transco in January 2009 in what was considered one of the biggest privatization moves in the country.

The $3.95-billion 25-year concession agreement it won in December 2007 could be extended for another 25 years. The franchise is good for 50 years.

Speaking to reporters on Wednesday, Gatchalian said he was “shocked that there was such a technology” that could remotely shut down the entire grid, “and more shocked that we did not do anything” to deal with that.

Energy Undersecretary Felix William Fuentebella said the security concern was among the issues brought up by the government with NGCP that remained unresolved.

No need to worry

Geng, the Chinese foreign ministry spokesperson, said SGCC took part in the power transmission project “as a cooperation partner, providing safe, efficient and high-quality electricity service.”

“The project is now operated, managed and maintained by the Philippine side, with the Chinese partner offering necessary technical support upon request,” he said.

“We hope certain individuals in the Philippines will look at cooperation with China in an open, objective and impartial manner,” Geng said. “There is no need to worry about the sky falling or imagine trouble where there is none.”

A similar statement was made on Wednesday by NGCC president and CEO Anthony Almeda who welcomed senators, congressmen and an independent third party to visit the company’s facilities “in order to dispel any security concerns.”

“There is nothing to be alarmed about the stake by (SGCC) in NGCP as its investment is limited only to being a technical adviser,” Almeda said.

Almeda stressed that the software and hardware system that controls the Philippine grid was operated only by authorized Filipino technical experts and that even he, as CEO, had no access to NGCP’s internal network except during an emergency and “only after undergoing a secure and confidential approval process.”

‘Win-win cooperation’

Geng said the Philippines was “China’s close and friendly neighbor as well as an important partner.”

“We support Chinese businesses’ pursuit of practical, win-win cooperation in the Philippines in accordance with laws and regulations,” he said.

Foreign Secretary Teodoro Locsin Jr. also scoffed at claims that Beijing wanted or would be able to access the Philippines’ power grid, alluding to the country’s poor telecommunications.

“With our internet, we are impervious to cyberattack. In fuck with our phone service China cannot get through to its  ‘humint’ [human intelligence] assets to blow up the grid,” he said in a tweet.—WITH REPORTS
FROM JEROME ANING AND JULIE M. AURELIO