The Senator in the News
:WHEN EX-RIVALS MEET
Ramos, Santiago clash over Masinloc deal
By Juliet Labog-Javellana
Posted date: August 04, 2006
SENATOR Miriam Defensor-Santiago and former President Fidel Ramos yesterday clashed at a hearing of a joint congressional inquiry into reports linking the latter to an allegedly anomalous $561.7-million deal won by a Malaysian firm associated with Malaysia’s ruling party.
Ramos, who Santiago accused of cheating her of victory in the 1992 presidential election, denied he was behind the sale to YNN Pacific Consortium Inc. of the 600-megawatt Masinloc coal-fired power plant in Zambales province, which Santiago described as one of the “crown jewels” of the Philippine power industry.
YNN failed to make the $227-million down payment for the sale despite several extensions and a government’s announcement it would terminate the contract on Aug. 6.
YNN is believed to be a dummy of Ranhill Berhad, a publicly listed company, which is said to be partly owned by leaders of the United Malay Nationalist Organization, which in turn has ties to the ruling Lakas-NUCD, the political party founded by Ramos.
Ramos turned the tables on Santiago and asked her if she was accusing UMNO leaders, Malaysian Prime Minister Abdullah Badawi and former Prime Minister Mahathir Mohamad of involvement in a graft-ridden contract in the Philippines.
Ramos, who said he readily agreed to appear at the hearing despite his status as a former President, said the charges linking him to the deal were unfounded.
He said he did not know any of the officials of Ranhill Bhd. or if they were also officials of UMNO, but he acknowledged that he had close ties to both Mahathir and his successor Badawi.Guilt by association
“The charges upon me are without basis because it is ... guilt by association. I don’t know if that is now an accepted principle in our jurisprudence,” Ramos said.
Santiago cut him off. “The chair disagrees with you. Guilt by association is guilt when a person...,” but Ramos this time cut her off: “May I continue Madam...”
“No,” Santiago said firmly. “The chair is speaking. I have the floor whenever I decide to have it. You are using guilt by association very loosely.”
Santiago, who co-chairs the Joint Congressional Power Commission (JCPC) with Lanao del Norte Representative Alipio Badelles, asked Ramos about a statement made by Senate Minority Leader Aquilino Pimentel Jr. that Ramos’ hand in the fraudulent sale of the Masinloc plant by the government to YNN must be investigated.
“Are you calling Senator Pimentel a liar?” Santiago asked.
Slightly raising his voice, Ramos stared at Santiago with his trademark lens-free eye glasses and said: “My answer to that is: ‘Are you [saying] the UMNO -- the ruling party of Malaysia -- is involved in corruption in the Philippines, specifically the Masinloc power plant?”
“Sir, it is not your function to raise questions with the chair,” Santiago replied. “Your function is to answer. You are now discharged by this chair. Thank you.”
But thanks to Senator Sergio Osmeña III and other senators who wanted to ask Ramos questions, he was not banished from the hearing until it ended.
Osmeña said a letter sent by Badawi to Malacañang asking that the Masinloc plant be sold to YNN helped fuel speculations about Ramos’ involvement.Strings pulled?
Pimentel said strings were apparently pulled in Malacañang to make Ranhill Bhd. a player in the country’s power sector in lieu of YNN, which had no financial capability to buy the power plant.
“Therefore, the implication is that some powerful figures in or out of government were pulling strings to bring in YNN (and Ranhill Bhd.) and media (reports) identified Mr. Ramos (as one of the figures),” Pimentel said.
Santiago later told reporters that Ramos was entitled to a presumption of innocence in the absence of hard evidence linking him to the deal.
“I am not saying that it was Fidel Ramos who pulled strings for YNN [but] YNN is getting very powerful political support here. We don’t now who it is,” she said.Meralco supply deal
She also said YNN chief Sonny Sun, who did not attend the hearing, apparently had the capability to pressure Manila Electric Co. (Meralco) to sign a supply agreement with YNN to buy its power.
But talks between YNN and Meralco on a power supply agreement were stopped after the consortium failed to meet the June 30 deadline to remit the down payment.
Ranhill Berhad made a power supply contract with Meralco a condition for its infusion of fresh equity into YNN.
Santiago noted that the Masinloc plant was sold as a merchant plant, without a transitional supply contract ensuring that someone would buy the power it would generate.
“A businessman will not buy a power plant unless he is assured he has a market or buyer for his power,” she said.
The senator said there was public suspicion that Ranhill, after its buyout of YNN, expected Meralco to sign the supply contract as a Philippine government concession to the Lopez-owned Meralco, which owes the government billions of pesos and has a pending application for a power rate hike.Alarm bells
Santiago also said alarm bells should have rung during the bidding when YNN “overbid,” with $561.7 million, compared to First Generation Holdings Corp.’s $275 million.
YNN’s bid was much higher than the $388-million tag price of the Power Sector Assets and Liabilities Management Corp. (PSALM).
She said the answer lay in how profitable the Masinloc plant would be.Crown jewels
“In effect what we are seeing is the sale of one of the most lucrative power plants of our government -- in fact it is often called one of the crown jewels of our power industry -- for a bargain basement price because, if you look at the statement, every year they will have a profit of $75 million. They can recover the investment in seven years and all the rest will be gravy,” Santiago said.
“And that is why today the JCPC explicitly directed the PSALM to allow the contract to terminate by Aug. 6. In other words we were able to nip in the bud what would have been a case of graft,” she said.Terminate sale
Sen. Joker Arroyo and Pimentel supported her recommendation to terminate the sale. Badelles said that was also the “unanimous position” of the House panel.
Ramos later told reporters Congress had no right to take an executive action and that it should leave the decision to PSALM and President Gloria Macapagal-Arroyo.