Lobregat worried over Zamelco’s mammoth debt, appeals to NEA

Published July 27, 2018, 8:48 PM

by Roel Tibay

By Ellson Quismorio

Zamboanga City 1st district Rep. Celso Lobregat expressed great concern Friday that the financial problems of the Zamboanga City Electric Cooperative (Zamcelco) might cripple its service, and cause massive power outages as a result.

Lobregat made this assessment amid reports that the electric cooperative is neck-deep in debt from power suppliers.

As such, the Mindanao lawmaker is calling for a more deliberate intervention from the government to come up with ways to save Zamelco and keep it operational.

“Actually, the problem is worsening because the system loss is not going down and not improving. Last month, Zamcelco’s power supply was almost cut off because it couldn’t pay its suppliers in time,” he said.

Zamcelco reportedly owes its suppliers some P2 billion in debt, which has accumulated through the years.

Specifically, Lobregat is appealing to the National Electrification Administration (NEA) to intervene and look for a company that can be awarded an Investment Management Contract (IMC) that will ensure the complete rehabilitation of the cooperative.

“I believe NEA should come in already dahil syempre antagal-tagal na ng prosesong yan (because that’s been a very long process). NEA should come in and maybe NEA should be the one to handle the bidding process dahil sa alam ko yung terms of reference parang niluwagan ng Zamcelco pati na yung qualification requirements ng pwedeng pumasok sa IMC (I know the terms of reference, Zamelco has somewhat made the qualification requirements for an IMC more lenient),” he noted.

Earlier this month, Zamcelco called for a rebidding of the IMC after Meralco-Comstech backed out of the contract due to concerns about a lower system loss cap that would require additional investment. But some observers are claiming that the new terms of reference have been watered down.

Lobregat is apprehensive with potentially awarding the IMC to the wrong company, since it will only worsen Zamcelco’s delivery of service. This will cause outages and Zamboanga residents stand to suffer.

“What is important to me is that the contract is awarded to a company that has experience in power distribution and will not treat the process as an experiment to lower or manage the system loss,” the solon said.
“The qualified bidder should not only have the financial backing, financial expertise but the technical expertise and track record as well,” he added.

According to Lobregat, Zamcelco’s system loss is now at 24 percent and only 12 percent of it can be passed on to the consumers. The rest has to be shouldered by Zamcelco and that, he said, is why it is losing so much money.

Lobregat said Zamcelco should do something fast to lower its system loss even before the IMC is set in motion. This will stop the bleeding and in turn halt the accumulation of more debts.

Zamcelco’s debts are expected to balloon further once the Energy Regulatory Commission (ERC) lowers the system loss cap from 12 percent to 8.3 percent, the cost of which will be passed on to the consumers.

“Because of that, Zamcelco is experiencing financial hemorrhage that could lead to bankruptcy. Just like month, it has to borrow money to pay for its suppliers. So, it becomes a cycle of debt unless something is done with system loss,” he concluded.