Don’t cajole Duterte

The National Grid Corporation of the Philippines has recently come out with a series of eye-catching advertisement and press releases that portend to impress it is helping the government of Pres. Rodrigo R. Duterte program improve the telecom industry. Nice.

The other day, it again came out with another story that hugged the page with a caption blazoned in six columns announcing: “NGCP, DICT reach accord on fiber optic capacity for NBP”. The pictures of Department of Information and Communications Technology Undersecretary Eliseo Rio Jr. and NGCP’s Henry Sy Jr. prominently occupy the space in the story. What is surprisingly missing is the absence of a statement from National Transmission Corporation (TRANSCO) who owns the assets which the two, NGCP and DICT, are peddling to President Duterte and the public.

Why are Finance Sec. Carlos G. Dominguez and TRANSCO Pres. Melvin Matibag missing in the equation? I have always believed that the Concession Agreement for the use of the power grid was between TRANSCO and NGCP. What went wrong between TRANSCO and NGCP that Henry “Big Boy” Sy, Jr. obviously sidelined DOF/TRANSCO in this sudden act of benevolence to help the government’s 3rd telecom player and too, the National Broadband Project of DICT.

This Letter from Davao aims to deter and unmask the subterfuge behind the Concession Agreement. Again, this is just one of the many glorious mysteries that the oligarchy had been hiding since the Aquino administrations came to being. They came with exotic names: “Mile Long Island” property in the heartland of Makati, “Mighty” Cigarette and “El Kapitan” Lucio tax cases which ended in multi-billion pesos settlements and the still fresh-from-the-oven -- sudden surrender of “CURE” Telecom frequencies by MVP after demanding P3-billion from the government that gave the spectrum free .

We support the personal crusade of President Duterte and Secretary Dominguez against crime and corruption and to remind the oligarchs that control the country’s major industries to “shape up, this is a new era”. Remember walls have ears and eyes so it’s time to behave.

Our unimpeachable source is the NGCP advertisement itself which came out in all major newspapers two weeks ago. The ad implies that TRANSCO refused to sign an agreement with NGCP for which reason it cannot lease its dark fibers to telecom players. But let us look at where President Melvin of Transco is coming from. We have to first understand what is the bone of contention here.
The “dark fibers” referred to are unutilized fiber optic cores embedded in the conduit that ran within the stranded grounding wire that protects the power line from lightning strikes. Modern technology had incorporated the dark fibers along with the grounding wire for communications use. Today’s designs of power towers, bridges, tunnels and railways already include these appurtenances and ‘cradles’ for telecom and power use.

When NGCP was awarded a Concession Agreement by TRANSCO it goes with it right to lease the ancillary assets such as telecommunication assets but subject to the limitation on the use of 50% of the income derived out of leasing the ancillary assets as set forth in Section 20 of RA 9136 otherwise known as the EPIRA law.

This looks reasonable enough except that there was a crack somewhere along the way in the first two years of their honeymoon. We heard that NGCP leased dark fibers and other facilities among them vacant lot spaces, high-voltage tower for attachments (like telecom antenna) to telecom companies without informing or disclosing to TRANSCO as required in the Concession Agreement.

The lease to telecom firms ran for more than one year and allegedly all income derived from the lease contract was neither disclosed nor shared with the government. NGCP, I was told, denied they had Telco facilities installed in the towers but pictures shown by unpaid contractors, who were tasked to dismantle the telco installations, tells a different story. I will not elaborate on this anymore. (By the way, a pair of fiber optic core was for P790 per kilometer. I do not have figures of co-location [site] and attachment rentals.)

President Matibag of TRANSCO, my source said, had pleaded to the NGCP to settle obligations because 50% of income from ancillary assets is supposed to be earmarked for the reduction of transmission wheeling rates as determined by the Energy Regulatory Commission. I would surmise that the beneficiary here would have been the electric cooperatives that are off the grid.

So take it from there. Whether Usec Rio is aware of this episode may not matter much to him, but as head of another government agency, he should know where this collision is heading to.

Given the unrealized income that the government missed and lost, and the alleged serious breaches that had been committed along the way I am sure that the Duterte government will not be cajoled with news releases and propaganda. This is another case for Cesar Dulay of the Bureau of Internal Revenue to look into.

Having written this piece, what nags me most is why cannot the oligarchs stay in their core business? In the case of NGCP, since they manifested that they are not in the business of telecommunications, why cannot they just surrender their ancillary rights on the dark fibers back to TRANSCO? From there TRANSCO and DICT should jointly oversee how to allocate and give valuation to this asset to the best interest of the public and the Telecom industry.

Why cannot these private corporate giants pay the right salary to their employees, open more job opportunities and honestly settle their taxes for after all they are the ones who derive most from where taxes are spent for?. Why should it take a Duterte to haunt and hunt them?