Second of three parts
TO recap where this story paused on Tuesday, the board of directors of the First Catanduanes Electric Cooperative (Ficelco) had in early May approved the recommendation of its technical committee to select the bid of Vivant Corp. subsidiary Isla Dagyab Energy Corp. over that of competitor SC Megaworld Construction and Development Corp. for the supply of 8 megawatts (MW) under an emergency power supply agreement (EPSA). The previous EPSA between Ficelco and Sunwest Water & Electric Co. (Suweco) would reach its one-year expiration date on May 15, and Suweco had declined to extend it.
The Vivant subsidiary, which was initially not identified by name in local news reporting on the issue, had offered a higher per kilowatt-hour (kWh) bid, but had been deemed to be more experienced and better-equipped to meet the requirement, whereas SC Megaworld’s experience in small power generation was judged to be modest at best. The decision of the board was evidently a contentious one, however, and was settled by a “tiebreaker,” as the local Catanduanes Tribune reported on May 14.
However, just a week later on May 19, and reported by the Tribune on May 21, the Ficelco board reversed itself, voting 6-1 in favor of the bid by SC Megaworld, a company led by one-time Catanduanes Rep. Hector Sanchez, because SC Megaworld’s bid was lower. The only holdout this time was Ficelco board president Romeo Santos, who had moved to accept the technical committee’s original recommendation and been the “tiebreaker” in the first board vote.
The Tribune’s May 21 story was an interesting shift in tone from its story a week earlier, which could be read as being heavily in favor of Vivant and dismissive of SC Megaworld. The May 21 story explained that those members of the Ficelco board who had dissented in the first vote pushed for a reconsideration for three main reasons.
First, SC Megaworld had offered a true cost generation rate of P21.65/kWh, compared with Isla Dagyab’s P29.53/kWh. Second, SC Megaworld had offered a better fuel efficiency factor of 0.26 liters per kilowatt-hour to Isla Dagyab’s 0.28 liters/kWh, and that “a representative of the Vivant subsidiary that would provide the gensets reportedly refused to match its rival’s lower fuel consumption rate.” Finally, the dissenting board members rejected the “alleged proposal” — that was how the Tribune’s reporting described it — by Isla Dagyab that the agreement would be a “take or pay” contract and that Isla Dagyab would be paid for the full year of supply even if it was not fully delivered.
In a meeting with the Ficelco leadership, which reportedly took place after this second vote reversing the earlier approval of the Isla Dagyab bid, SC Megaworld’s Sanchez explained that his company would lease the diesel gensets being used by the outgoing Suweco that were owned by United Power Rental Inc. of Singapore, which would provide 4 MW of the promised 8 MW supply within a week of receiving a notice to proceed. The remaining supply would come from new gensets that SC Megaworld would acquire, and that those would be operational within an additional three weeks. Sanchez also apparently clarified that one of the objections to the original bid award, the fuel efficiency factor, was not as clear-cut as it first seemed; the 0.28 liters/kWh figure was indeed accurate for the secondhand gensets used by Suweco, but that the new ones SC Megaworld intended to install would have the lower 0.26 liter/kWh rating.
Sanchez also reportedly told Ficelco’s board that SC Megaworld had secured an agreement for 500,000 liters of fuel storage, which was one of the key requirements — really, there were only two — of the EPSA bid eligibility. SC Megaworld had been given a guarantee of the required storage for the exclusive use of the 8-MW power plant by the Silangan Fuel Corp., according to the Catanduanes Tribune report, the agreement for which was to be finalized after the EPSA bid was awarded.
Sore losers?
At this point, the information gathered by the Partners for Affordable and Renewable Energy (PARE) — which I unfortunately misidentified as “Partners for Affordable and Reliable Energy” in the first installment due to a momentary distraction, so my apologies for that — indicates that some things were going on behind the scenes that were not reported to the public in Catanduanes, and presumably, not to Ficelco’s “member-owner-consumers,” either.
A significant amount of information was received by PARE, which the group shared with me with the strict disclaimer that much of it had yet to be verified, despite PARE’s diligent efforts to do so, an aspect of this story I will discuss later on. The first red-flag allegation the group received was that, sometime well prior to the initiation of the bid and vetting process for the EPSA to replace the expiring Suweco EPSA, and while talks were still ongoing between Ficelco and Suweco to try to get the latter to extend its agreement, someone at the National Electrification Administration (NEA) directed Ficelco to prepare a site adjacent to Ficelco HQ for the anticipated 8-MW diesel genset power plant, at a reported cost to the cooperative of about P1.7 million. The implication here was that NEA already had a preferred supplier or otherwise knew which supplier would be selected, and thus knew what the site requirements would be.
Although this latter bit was pure speculation, it was rather strongly reinforced by NEA’s reaction to the reversal of the first bid award decision by the Ficelco board. After reportedly receiving complaints from parties unknown that SC Megaworld had been chosen in spite of not meeting the two key qualifications — namely, the 500,000-liter fuel storage requirement and a 10-year track record of off-grid energy supply experience — the NEA issued show-cause orders to the six Ficelco board members who had voted in favor of SC Megaworld.
In spite of the board members providing, as directed, detailed explanations for their votes, the NEA subsequently issued 90-day “preventive suspensions” on all six of them, even though — according to a later explanation by Ficelco’s general manager — they reversed themselves a second time and voted to accept Isla Dagyab’s bid. Another aspect of the NEA punishment that may have made its sting a bit worse is that it emerged that the reconsideration of the initial award was not just the “dissenting” board members’ idea, but had been urged by the provincial council’s energy committee as well.
To be concluded on July 12, 2026
ben.kritz@manilatimes.net
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