A FINANCIAL ANALYSIS OF ALECO by Albay Gov. Joey Sarte Salceda 1. Debt has mounted to P3.7bn but largely due to continuous losses for the past 18 years. 2. Losses started way back 1995 when I was at the peak of my career in Swissbank when the "systems loss cap law" went into effect. Sec. 10 of Republic Act No. 7832 signed December 8, 1994 "AN ACT PENALIZING THE PILFERAGE OF ELECTRICITY AND THEFT OF ELECTRIC POWER TRANSMISSION LINES/MATERIALS, RATIONALIZING SYSTEM LOSSES BY PHASING OUT PILFERAGE LOSSES AS A COMPONENT THEREOF, AND FOR OTHER PURPOSES" 3. Per DOE estimate, financial losses due to collection inefficiency amounted to P2.4bn from 1995 to 2012. In 2012 alone, this amounted to P478m. 4. Per DOE estimate, financial losses due to systems losses (or power bought but not billed/sold) amounted to P1.959bn. In 2012 alone, this amounted to P240m. 5. Employee inefficiency contributed only P424m... and a small loss of P4m in 2012. 6. If we break down the expenses of Aleco, P2.1bn of the P2.4bn were covered by ORs to Aboitiz and WESM, so rent is not feasible. Moreover, depreciation and interest expense were largely "accrued" or noncash, so they can hardly cover "dysfunctional behavior". 7. The remaining expense of P185m is largely for salaries at P10m per month leaving only P5m for operations, which is why it could not operate efficiently leading to brownouts and thus aggravating revenues losses. 8. Aha, the usual suspect - CAPEX - which has fallen to only P26m per year which is mainly for maintenance capex like posts and transformers. NOW, WHERE IS THE PROOF OF THE PUDDING? I have politely asked DOE Secretary Ikot if he really thinks there is political corruption in Aleco, his answer is NO and he thinks the problem is largely structural and organizational - the inability to collect, the inability to bill and the inability to modernize.
Posted on: Sat, 24 Aug 2013 07:18:13 +0000
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