BIZ BUZZ: Consunji ready for battle for Semirara
A potential new operator of the highly priced Semirara coal site will need to cough up P55 billion for equipment, as the top executive of Semirara Mining and Power Corp. (SMPC) balked at a proposed auction rule forcing the latter to give up its machinery.
While the group awaits a court response on its wish to bar the Department of Energy (DOE) from requiring it to share detailed asset data with competitors, SMPC has raised another issue: a threat to its control over its massive equipment fleet.
“If you want to produce 60 million tons a year, you have to spend at least P55 billion on equipment alone,” Isidro Consunji, chair of SMPC, told reporters in a chat on Monday night.
The island’s mine life, however, is just good for about eight years.
“So you can’t recover [the investment],” Consunji said.
This single claim could change the game, or dampen the appetite, of investors wanting to snatch SMPC’s glory.
And Consunji isn’t bowing down easily, making its points heard against some provisions included in a draft joint administrative order meant to guide the evaluation and award of contracts, including other rights covering natural resources.
In a lengthy letter addressed to Energy Secretary Sharon Garin, SMPC president and COO Maria Cristina Gotianun asked the government to eliminate Section 6.10’s asset turnover requirement “in its entirety.”
It also said that the provision cannot overrule Presidential Decree No. 972 Section 11 (c), which lays out the rule for asset disposition. Surrendering the equipment to the winning bidder could be unconstitutional, given SMPC’s existing contract.
Its recommendation? The government must only push this for new deals, with existing pacts following a fair handover scheme.
The shift in the DOE’s focus away from technical expertise to financial muscle likewise raised a few eyebrows.
“If national interest includes “energy security” and “prudent and sustainable utilization,” then operational capability—not only the financial offer—must be a factor in the award,” SMPC said.
Consunji has yet to receive a response from the agency, or even a copy of the decision of the Department of Justice rejecting SMPC’s contract extension plea.
Garin, however, hopes to pursue the auction before the year ends, an agonizing wait for SMPC as the mounting uncertainty has already forced it to let go of hundreds of employees.
And more could follow.
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