EDITORIAL-November 19

Akelco Losses Heavily, Coop Records Show

By Recto I. Vidal

In a recent news conference of the executive committee of the Aklan Electric Cooperative, the latter lambasted the coop's critics for branding as "fake" the achievements of Akelco in the last three years It all started when provincial board member Franklin Quimpo, in a privilege speech, questioned the hype behind Akelco's awards and categorization as an A+ cooperative. With available data obtained from the cooperative of its financial condition from the year 2001 to 2004, Quimpo said that Akelco incurred substantial lossessduring the said period. "Its losses now stand at P253.5 million as of 2004 as revealed in its 2003-2004 financial statement. The most dramatic increase was made in the year 2003 when its losses jumped to P243 million from the 97 million or a 150 percent increase," Quimpo revealed. Indeed, records obtained by Madyaas Pen showed that Akelco's long-term debts rose from P173,545,518 in 2002 to P277,564,152 in 2004, or an increase of P104,018,634. With such an amount available for the construction, maintenance and rehabilitation of power distribution lines, systems loss will dramatically bereduced and services better provided. In said press conference, Malilay explained that Akelco incurred this loss in 2004 because it was "forced to pay P26 million in interest for NEA loans of the past administration." "It was also made to pay P6.7 million in real property tax to the provincial government. That's P32.7 million precious money taken away from Akelco!," Malilay pointed out. Akelco's A+ category was awarded by NEA who took over the management and installed a change management team at a cost of P310,000 a month, Quimpo volunteered. Resords obtained by PN showed Akelco, under the Change Management Team, did not pay a single centavo in amortization to NEA. The present NEA loan is P99M, down from P129.6M in 2002 (which loan releases started from May 5, 1972 up to July 4, 2000), because P217,885,412.90 was condoned by NEA on February 3, 2005 pursuant to the EPIRA law,including p90,068,787.84 for the Dendro-Thermal Power Plant in Nabas. It was learned the NPC loan of P153.5 million was not fully paid as it was restructured late in 2002 and is being amortized. Of the loan from suppliers, Akelco under the change management team, did not pay a single centavo to the suppliers of the IOMVA transformer substation in Nabas which it transferred to Caticlan. Of the interest on NEA loans, the previous management has seen it coming, the NEA loan condonation, as it did the other coops. So the money for the loanAmortization was used to finance the construction of the IOMVA S/S in Caticlan, the upgrading of the Altavas S/S from 1.75 to 5 MVA, to effect a salary increase on May 1, 2000 even if NEA deferred action on the covering resolution. NEA also admitted in the 1999 Congressional Hearing in Boracay that it only provided P7M loan assistance for Boracay, so that the coop was forced about P20M backbone line in Boracay from its own. The new management had to apply for a loan of P32.784M under the NEA's Modified Relending Loan for it to be able to pay its November and December 2004 power bills with NPC, in the total amount of P45,218,638.18 It was not able to pay its amortizations for the NPC restuctured NPC loan religiously, as its notes payable for the restructured NPC loan was P32,466,213.00 by the end of 2004. It was forced to use the P35M from Mirant Avon River Holdings Corp. for the lease of land in Nabas, to fully pay NPC for the November and December2004 power bills and some arrearages in its restructured NPC loan. The new management, claimed it was able to reduce the systems loss from 23 percent to 14 percent and collection efficiency from 78 percent to 99 percent. As per NEA Audit Report of 2002, system loss in 1991 was 21 percent and collection efficiency was 90 percent, even with a call for non-payment of powerbills by certain government officials out to oust Mationg then. "If the new management claims a 99 percent collection efficiency, how come its account receivables for 2003 is P65.9M+ and for 2004 is P77.12M+?" asked former provincial board member Romeo Inocencio who scrutinized Akelco's financial records. The new management also claimed that Akelco employees are now receiving higher salaries and more benefits which are given on time, so that the morale ofemployees is high. But this was disputed by a group who called themselves "Concerned Akelco Employees Brave Enough to Expose the Truth but Scared of Losing their Jobs." In a position paper, the group claimed that "the employees continually work in fear, as there is no respect for security of tenure. Many have been forcedto early retirement for the flimsy reason that their positions have become redundant. Many have been forced to accept a cut in their salaries or accept adiminution of their duties and functions. The new management has always said that the NEA may declare the coop bancrupt and the employees will lose theirjobs. So much so that about 72 employees have thought of early retirement by year end." "Akelco, as a power distribution utility, is supposed to be a partner in development. It should always have the interest of the people at heart," declared Board President Nemesio Neron in media interviews. But critics claimed that Akelco, under the change management team, has other ideas. The Electric Power Purchase Agreement (EPPA) it signed with Mirant Global Corporation is a stab in the back of tis member-consumers. It conveniently sidestepped the issues being raised, and branded those who opposed as obstructionists to development," lamented Inocencio in an interview. But what are the issues? "That the power plants are old but are being passed off in the EPPA as brand new.That the rates are significantly higher than NPC's.That the EPPA as a whole is lopsided in favor of Mirant. These are valid issues that should have been clearly discussed with the consumer members," SPmember Ramon Gelito maintained. /MPmailto:madyaas_pen@yahoo.com