Audit the NGCP

If there is one franchise this administration ought to turn upside down, it is the franchise that has allowed the Chinese to control the National Grid Corp. of the Philippines (NGCP), the entity that operates the lone power grid supplying electricity to a large part of the country.

For some time now, senators looking at the peculiar situation in the NGCP have found increasingly convincing evidence that something sinister is happening in the NGCP right under the noses of Filipino executives and government officials who were supposed to safeguard the country’s national security interest in the vital public utility.

That China, through its state-owned State Grid Corp. of China (SGCC), ended up owning 40 percent of the NGCP seems to be not an accident. The SGCC was supposed to be only a “technical partner” of the Filipino consortium composed of the Monte Oro Grid Resources Corp. owned by Henry Sy Jr., and the Calaca High Power Corp. led by Robert Coyiuto Jr.

Back in November last year, Sen. Risa Hontiveros filed a resolution calling for a national security audit of the NGCP following information that only Chinese engineers are now able to operate and troubleshoot the transmission facilities and that China can remotely shut down the power grid from a monitoring system located in Nanjing.

National Transmission Corp. (Transco) president Melvin Matibag confirmed that disturbing possibility before the Senate energy committee during a budget hearing.

“Given the technological advancement right now in the telecommunications as well as in software, that is possible,” he said.

Matibag added that while Transco owns the transmission facilities and has oversight over the NGCP, its access to the system was limited.

It was also learned that while Chinese engineers were officially limited only to providing technical assistance, the SGCC somehow managed to translate portions of the operation manual to Mandarin, leaving Filipino workers unable to operate and control the system.

More anomalies have come to light recently. During last week’s hearing, Sen. Sherwin Gatchalian warned that he would push for the revocation of the NGCP franchise after it was also revealed that Chinese executives are or have been in control of the NGCP, in violation of the Constitution which provides that management positions for public utilities should be held by Filipino citizens.

Amid denials by the NGCP, Sen. Richard Gordon presented a December 2011 document for the “Luzon substation expansion project 3” signed by Wen Bo, a Chinese national who bore the title of chief technical officer of the NGCP.

Gatchalian said Wen Bo’s position was the second highest; the NGCP board of directors itself is chaired by Zhu Guangchao, a ranking officer of the SGCC.

Hontiveros framed the issue succinctly: “Mr. President, the (NGCP) chair is Chinese, almost all the contractors are Chinese, the systems software was made in China, and the training is in China. But we have to trust and believe that this is Filipino-run?”

Adding to that troubling setup, NGCP president and CEO Anthony Almeda inadvertently told the Senate committee that the power grid had been attacked by hackers “a hundred times already.”

Who are these hackers and where is the operation coming from? Where are the reports on such incidents? How were Chinese personnel able to bag choice management positions in the company? Not one Filipino executive knew of the constitutional prohibition on such practice — or no one simply dared to contradict the takeover?

The NGCP is not explaining in any adequate way until now. In fact, in a brazen display of defiance, it continues to refuse submitting to a government audit. The NGCP has prevented Transco and the Department of Energy from conducting an audit of its operating system, according to Energy Secretary Alfonso Cusi, who said the NGCP even questioned the DOE’s authority.

It’s a wonder how a private corporation operating such an important public utility can be this adamant about preventing outside scrutiny. What the dickens is going on in there, and what is the NGCP so desperate to hide?

Gatchalian warned the company to allow the DOE and Transco to conduct the audit or face revocation of its 50-year congressional franchise. “I have a very simple deal for NGCP: You allow the inspection, or else we would proceed to review your franchise because there was clearly a violation of the Constitution.”

It’s an ultimatum the Senate should stand by. As “onerous contracts” go, here is a glaring example of an enterprise whose suspicious behavior and murky state of affairs have become inimical to the public interest.