BIPCOR questions award of contract to ‘substitute’

By Manila Standard Business – January 21, 2021 at 09:10 pm

Bantayan Island Power Corp. on Thursday warned about the impending award of the power supply contract on the island to an alleged “substitute.”

BIPCOR, the current holder of the power supply contract for Bantayan Island, in a statement, questioned the propriety and validity of the move by Isla Norte Energy Corp. “in presenting itself as a substitute” for Vivant Integrated Diesel Corp.-Gigawatt Power Inc.—the consortium that took part in the bidding process.

Bantayan Island Electric Cooperative Inc., the power supplier on the island, held a competitive selection process for the supply of 15 megawatts of electricity ahead of the November 2021 expiration of the power supply agreement held by BIPCOR. The two participants in the bidding were the Vivant-Gigawatt consortium and BIPCOR.

The bidding committee, however, disqualified BIPCOR on the ground that one of its submitted documents, the supplier’s certification, was not notarized. BIPCOR said the disqualification lacked basis.

The bidding panel went on with the CSP and declared the Vivant-Gigawatt consortium as the winning bidder.

BANELCO said in a previous statement it observed due process in the selection and awarding of the power supply contract to a subsidiary of Vivant Energy. It said the CSP was witnessed by DOE, National Electrification Administration and National Power Corp. representatives.

BANELCO and INEC filed in October 2020 a joint application for the Department of Energy’s approval of the PSA forged between the two applicants. The DOE set the preliminary hearing on the application on Dec. 3, but this was reset to Dec. 11, 2020.

BIPCOR lawyers said there was no legal and factual basis for INEC to “substitute” for its mother consortium as a respondent in the case.

“It must be stressed that INEC has not presented an iota of evidence that it has validly succeeded to the rights and obligations of respondent consortium under the assailed procurement of power supply by BANELCO (Bantayan Island Electric Cooperative Inc.),” BIPCOR said.

They said allowing the consortium to exit from the case on the basis of INEC’s claim that it was a “special purpose vehicle” for the consortium would be tantamount to dismissing the case against the respondents.

BIPCOR said in a motion filed before the Mandaue City Regional Trial Court that there was no court ruling recognizing INEC as a party to the case.

“Thus, in compliance with Section I-20 of the bidding procedures, only the respondent consortium and not INEC, has the personality to contract with respondent BANELCO,” the motion stated.

It said BANELCO would also be found in violation of the bidding procedures if it awarded the power supply agreement to INEC which allegedly did not participate in the competitive selection process. BIPCOR said that INEC’s claim of transfer of interest could not be sustained for lack of merit.

BIPCOR, which holds the license to supply electricity to Bantayan, said the consortium is an indispensable party to the case and could not be arbitrarily replaced by INEC for any reason.

“Respondent consortium may not simply be dropped and/or substituted by a mere necessary party as what INEC is claiming to be,” it said.