Semirara bidding rules to ‘kill golden goose’–SMPC
Semirara Mining and Power Corp. (SMPC) said Monday that it has paid P70.5 billion in government share over nearly three decades, warning that the country could lose a major source of revenue if it pursues the auction under current rules.
“Why kill the golden goose for zero gain?” the company said in a statement on Monday.
Over its 29 years of operations, the Consunji-led group said it has also contributed around P600 million annually to Caluya in Antique.
Aside from pitching in government revenues, SMPC claimed its coal supply allows for the delivery of cheaper baseload power, with coal-fired facilities logging an average price of P4.05 per kilowatt-hour (kWh) in the Luzon-Visayas grid in September.
Its business likewise supported over 4,000 jobs.
SMPC, however, has been cutting its workforce due to limited operations triggered by “disadvantageous DOE (Department of Energy) bidding rules.” Earlier this month, the group let go of nearly 1,000 employees amid the massive seawater inflows at one of its coal sites. It said the uncertainties surrounding the coal bidding “complicate planning for investments” for equipment.
Since the government is leaning toward giving the contract to the bidder with the highest offer, SMPC warned that if the winner has no mining experience, the Philippines would see zero coal production and zero royalty payments to the government.
‘Lapses’ in the process
The company described this as “a complete defeat of the DOE’s objective of raising the most revenues.”
“The bidding rules discourage industrialization. We hope the DOE realizes that its bidding rules directly contradict the sales pitch of our top officials when they go abroad to invite investors,” it added.
The rules also do not state the penalties to be imposed on the winning bidder if it fails to produce coal, it noted.
It again raised alleged lapses in the bidding process, saying the DOE neither conducted prequalification nor issued routine bulletins. SMPC’s questions were likewise not addressed.
