Subject: [cwj 9] San Roque Dam a Rip-off for Philippines
From: Corporate Watch in Japanese <cwj@corpwatch.org>
Date: Fri, 05 May 2000 14:20:37 -0700
Seq: 9
For more information on the campaign against the San Roque dam project and
Japanese financing, visit the International Rivers Network website at
http://irn.org/programs/sanroque/
Press Release
San Roque Dam a Rip-off for Philippines
May 5, 2000
The San Roque dam project is a rotten deal for Philippine electricity
consumers and taxpayers, an independent study commissioned by International
Rivers Network shows. A review of the Power Purchase Agreement for the $1.1
billion dam project reveals that the cost of power from San Roque is hugely
inflated, and that the San Roque Power Corporation (SRPC) stands to gain
massive profits from the project, whether or not it successfully produces
power.
Ms. Joan Carling, Secretary-General of the Cordillera People's Alliance,
says: "Under this Power Purchase Agreement, the SRPC has everything to gain
and nothing to lose. This agreement is a clear example of how foreign
investors in the Philippines are assured of mega-profits while the Filipino
people are burdened with the economic, social, and environmental costs of
power projects. The government should immediately cancel the PPA."
The review, conducted by Dr. Wayne White of Foresight Associates in the
USA, shows that the National Power Corporation (NPC) will be paying the San
Roque Power Corporation (SRPC) between 13 to 21 pesos (US$0.32 to 0.51) per
kilowatt hour of electricity
purchased. NPC has agreed to pay over $400 million pesos ($10 million) per
month to the SRPC regardless of whether there is sufficient water available
to generate power. The PPA forces NPC to buy San Roque power even if it
doesn't need it.
Dr. White states that "despite private sector participation, the project is
a public subsidized construction contract which will compensate the
developer during project life even in the event of low generation and/or
absence of a market for the produced power." He concludes that "not only
does the private sector participation not demonstrate economic viability,
the reliance on subsidy ... suggest[s] that the project is not economically
feasible in its own right."
From the terms of the PPA, it appears that in the event of NPC
privatization, the Philippine government will still be responsible for
guaranteeing that the San Roque Power Corporation gets paid according to
the onerous terms agreed upon. Furthermore, with the privatization of NPC,
the government will be responsible for so-called stranded costs from NPC's
obligations and contracts. The government will, of course, pass this on to
the people in the form of additional power costs, taxes or levies. In the
case of the San Roque dam, NPC's US$400 million loan will most likely
figure among the stranded costs, which amount to between P244 billion and
P420 billion.
Ms. Aviva Imhof, SE Asia Campaigner with International Rivers Network,
says: "It is difficult to understand why the NPC entered into an agreement
that is so obviously one-sided, granting unprecedented guarantees of
financial return to the developer while imposing enormous risks on the
Philippine side. The Philippines should find a way out of this contract as
soon as possible. Under these circumstances it is unconscionable for the
Japan Bank for International Cooperation to continue funding the project."
The San Roque Dam is to be located on the lower Agno River of Pangasinan
Province, in the Cordillera region of Luzon island in the Philippines. The
project is being financed by the Japan Bank for International Cooperation.
SRPC is a private consortium including Sithe Energies of New York, and
Marubeni and Kansai Electric Company of Japan.
- 30 -
For further information, contact:
Joan Carling
Cordillera Peoples Alliance
cpa11@skyinet.net
Fax: +63.74.443.7159
Tel: +63.74.444.9196
Ms. Allen Ebersole
KALIKASAN- Peoples Network for the Environment
kalikasan@pacific.net.ph
Fax: +63.2.921.1531
Tel: +63.2.920.9099
Ms. Aviva Imhof
International Rivers Network
aviva@irn.org
Fax: +1.510.848.1008
Tel: +1.510.848.1008
====================================
Corporate Watch in Japanese
Transnational Resource and Action Center (TRAC)
P.O. Box 29344
San Francisco, CA 94129 USA
Tel: 1-415-561-6472
Fax: 1-415-561-6493
Email: cwj@corpwatch.org
URL: http://www.corpwatch-jp.org
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