NATIONAL GRID Corp. of the Philippines (NGCP) said its successful outcome of its Singapore arbitration case serves as “vindication,” with a neutral third party affirming it has honored the terms of its concession agreement, specifically the restrictions on foreign ownership.
“How will that affect us moving forward? Operationally, siguro wala (maybe there will be no impact). I hope, however, that the weight of the disinterested third party’s ruling will clear the clouds surrounding NGCP and how we run the transmission system,” Cynthia P. Alabanza, NGCP assistant vice-president for public relations, told reporters on Wednesday.
The Arbitral Tribunal of the Singapore International Arbitration Centre ruled in favor of NGCP in a final decision dated Feb. 19 in its dispute with the Power Sector Assets & Liabilities Management Corp. (PSALM) and National Transmission Corp. (TransCo).
The arbitrator declared that the grid operator did not violate the nationality restrictions in the Philippine Constitution and the Anti-Dummy Law — which restricts foreign ownership in public services companies.
“It’s clear that there was no violation of the prohibition, among other things… That is the biggest win for NGCP,” Ms. Alabanza said.
Domestic corporations Monte Oro Grid Resources Corp. and Calaca High Power Corp. each hold 30% of the outstanding capital stock of the NGCP. State Grid Corp. of China holds the remaining 40%.
In 2018, the NGCP filed an arbitration case against PSALM and TransCo over the interpretation of the parties’ concession agreement.
The grid operator had sought, among other things, a declaration that a payment made on July 15, 2013 amounting to P57.88 billion was valid, as well as the payment of a further P4 billion “which should have been borne by TransCo under the concession agreement, but was advanced by NGCP.”
PSALM and TransCo argued that NGCP was in “concession default” for having allegedly violated the national restrictions for public utilities under Philippine law and the concession agreement.
The NGCP obtained a 25-year concession in 2007 to operate the power transmission network after an open, public and competitive bidding process. It officially started operations as a power transmission service provider in 2009.
“So, vindication ‘yun na sumusunod lang kami sa mga batas na naipasa at mga kontratang inihain ng gobyerno nang isinapribado nila ang transmission at NGCP ang nabigyan ng concession (It’s a vindication for us, signifying that we followed the law and the contract with the government when the transmission grid was privatized and NGCP was awarded the concession),” Ms. Alabanza said.
PSALM and TransCo said on Monday that they referred the matter to the Office of the Government Corporate Counsel for appropriate action. — Sheldeen Joy Talavera
