Privatization behind Daneco row, says Bayan Muna and consumer group

Jan. 03, 2014

Davao Today

TAGUM CITY – An electric consumers group in Davao del Norte disclosed that one of two rival managements to the electric cooperative here has been inviting an Aboitiz power company to buy into the cooperative.

In a forum here on December 28 at Balinsayaw Restaurant, the Save Daneco Movement (Sadamo) said that the National Electrification Administration (NEA) has been “wooing the entry of private firm Aboitiz Power Corporation to buy-in debts incurred by Daneco”.

“NEA undertook a valuation to determine the true worth of Daneco [Davao del Norte Electric Cooperative] in the face of a proposed buy-in of Aboitiz Power Corp. (APC) through a joint venture under a Private-Public-Partnership scheme,” Arquiza said.

Arquiza said Aboitiz wanted to acquire 70 percent share of Daneco through a “capital infusion of P301 million” which he said will be used to pay off all of existing debts of Daneco to the NEA.

Arquiza said while the public “is caught with the parochial issue of NEA and its rival, the Cooperative Development Authority (CDA), especially with the killing of NEA radio host Rogelio Butalid, the Department of Energy exercised its step-in power on Daneco two days after Butalid’s death”.

The NEA was given control of Daneco in August last year through the intervention of Energy Secretary Carlos Jericho Petilla who implemented a court ruling that favored NEA over the CDA.

But Daneco-CDA Board Chairperson, Dioscoro Granada, disputed this NEA takeover, saying the government must uphold the May 2012 referendum of Daneco consumers that voted for CDA.

“The Aquino government should not be blind or deaf to our problems, they should listen to the people who own the cooperative,” Granada said.

Bayan Muna Partylist Carlos Zarate said the Daneco row showed “how small-time players will be dismantled by the government’s Public-Private Partnership (PPP) favoring big electric players”.

“With Aquino’s PPP, the power industry will all fall into the hands of private capitalists. Even those held by legitimate cooperatives will be dismantled,” Zarate warned.

“What’s happening to Daneco will not only lead to higher electricity rates but also to conflict among consumers and managers,” he added.

Zarate pinned the energy problem on the failure of the EPIRA, or the Electric Power Industry Reform Act of 2001, saying that the law intended to break up the monopoly in the power sector, empower electric cooperatives and lower power rates, did not materialize.

“Capitalists now see that if they hold franchises of cooperatives, they will profit more. This is what I see is the motive of the motive in Daneco,” Zarate said.

Zarate noted electric cooperatives lose out as they incur debts with high power rates.

“The power industry is still monopolized by only a few players, spike of rates are unprecedented and the move to privatize electric cooperatives who are distributors are likely to continue,” he added.

He said five companies control 80% of the country’s power industry: Cojuangco/San Miguel Corp. (22%), Aboitiz (20%), Lopez (18%), Ty (12%) and Consunji (8%).

Although a referendum is set this January to let Daneco consumers decide which group will control Daneco, Zarate urged the consumers and managers to go beyond their row and unite to fight privatization. (Mart D. Sambalud/

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