The fixed foreign exchange rate incorporated in the concession agreement for the National Transmission Corporation (TransCo) is viewed to be causing massive financial losses for the government.
This, as the concessionaire National Grid Corporation of the Philippines (NGCP) has been enjoined to set its payments to the Power Sector Assets and Liabilities Management Corporation (PSALM) in Philippines pesos while the latter settles its obligations in dollars or foreign currencies.
The 25-year concession agreement for the transmission firm reportedly fixed forex conversion rate at P42 to US$1.00; even if the exchange rate at the time of the asset's privatization was already at P45 vis-a-vis the greenback. There have also been further fluctuations to P46-P47 range in the past months.
girls costumesWidely-perceived irregularities in the privatization transaction entered into by PSALM are among those being brought into the attention of the newly created Truth Commission, especially for deals seen disadvantageous
Chloe Handbags Fake Handbagsto the government or to the Filipino people who will eventually pay the price for such acts of malfeasance.
"Why did (PSALM) agreed to such an obviously disadvantageous agreement with NGCP when PSALM itself needs the dollars to service the dollar needs of NPC (National Power Corporation) and TransCo," sources averred.
Under the reported nature of the transaction, it was tipped off to media that the government loses about P3 for every dollar that the concessionaire should have paid upon its assumption of operations of the transmission facilities.
Throughout the 25-year duration of the concession pact, it is estimated that government losses from the transaction may reach a whopping $3 billion; if no improvements favorable to the country's currency will happen in the conversion rates.
PSALM is also being maligned for throwing the country into fresh round of mounting indebtedness, as its loans soared to piercing jewelry wholesale as much as $8.0 billion again in recent months.
Former TransCo president Alan T. Ortiz branded it to have been caused by "corruption and mismanagement", and that somehow defeated the intent and spirit of the Electric Power Industry Reform Act (EPIRA) from freeing the de-monopolized NPC from monstrous financial obligations.
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