A HOUSE of Representatives committee on Tuesday mandated the National Grid Corp. of the Philippines (NGCP) to submit a copy of its shareholders’ agreement amid national security concerns over China’s involvement with the state grid operator.
The House legislative franchises panel gave NGCP a week to comply with its order to submit the grid operator’s shareholders’ agreement with congressmen.
A shareholders’ agreement is a document outlining how a company is to be operated, and the rights and obligations it provides to stockholders.
“I feel that the document is very important in this inquiry because we’d like to determine if it’s run, controlled, managed, and operated by the Chinese or Filipinos,” Surigao del Norte Rep. Robert Ace S. Barbers told lawmakers during an inquiry into the NGCP’s performance.
NGCP lawyer Lally C. Ortilla-Mallari, however, said the document is “confidential” as it is currently being used as evidence in an arbitration case.
NGCP’s shareholders’ agreement is the “subject of and has been produced as evidence in an ongoing arbitration proceedings” against the Philippine government’s grid asset management agencies, Ms. Ortilla-Mallari told the committee.
“As evidence in an arbitration proceeding, the shareholders’ agreement is protected by confidentiality under Sec. 23 of Republic Act No. 9285 or the Alternative Dispute Resolution.”
In a statement on Tuesday, the NGCP reiterated it is a Filipino-led company, with 60% of its shares owned by Filipinos.
The consortium comprised of Monte Oro Grid Resources Corporation, Calaca High Power Corporation, and State Grid Corporation of China won the bidding for the operation of the country’s transmission grid for a purchase price of $3.95 billion.
Monte Oro Grid Resources and Calaca own 60% of the company while State Grid Corporation of China holds 40%, meeting the law’s requirement for foreign investors.
Lawmakers in the past years have raised concerns over the State Grid Corp. of China’s involvement with the NGCP. The Chinese company has a 40% stake in the power grid operator. It gained partial ownership of the NGCP in 2007, running it alongside other Philippine companies.
The House also floated the possibility of subjecting NGCP to a “national security review” last week, with Albay Rep. Jose Ma. Clemente S. Salceda saying the state grid operator could’ve violated the Philippine Anti-Dummy Law.
The grid operator also said there is no single button to cut down power in the country amid fears of a power grid attack.
“Decisions are based on established procedures. There are separate procedures for maintenance and emergency cases,” Clark N. Agustin, NGCP Assistant Vice-President for System Operations, said in mixed English and Filipino in the same statement. He noted that there are control centers in Luzon, Visayas and Mindanao.
“If you decide to cut off power for the entire country, there’s no central control point with a single button,” he said.
Mr. Agustin also China is a technical partner, allowed by the government, hence, the use of China-made equipment in its operations.
“There were no midnight deals. The NGCP remains transparent in all its transactions,” he said. — Kenneth Christiane L. Basilio