Despite receiving Php38,625 million as dividends from the 30% share of the Joint Venture Agreement (JVA) with Salcon Power Corporation, the Sanggunian Panlalawigan (SP) were still groping for information on the financial operations of the power company that runs the electric distribution in Tagbilaran City.
The SP, during a committee hearing on Friday, July 24, 2015 called for the purpose of getting to know the details of the JVA, fell short of their expectations after the two Board of Directors appointed by the Provincial Government of Bohol (PGB) to represent the 30% share in Bohol Light Company Inc. (BLCI) dawdled over their explanations on the intricacies of corporate finance.
Only the operation of BLCI was discussed while that of the Bohol Water Utilities Inc. were set aside pending the appearance of Atty. Antonio Amora, Board of Director of the water utility since 2008.
BLCI is one of the two joint venture corporations who owns and operate the electric distribution system in Tagbilaran City with the PGB’s equity of 30%.
Board Member (BM) Atty Tomas Abapo took the occasion to hail the JVA as “the right thing” recalling the harrowing experience with poor water supply and intermittent power interruptions when the power and water systems were owned and manage by the provincial government.
Abapo is the lone SP member that was part of the 1998-2001 SP that deliberated and approved the Joint Ventures to Rehabilitate, Own, Operate and Maintain the Provincial Electric System and the Provincial Waterworks System.
Then Board Member Concepcion Lim now sitting as the Vice Governor and SP Presiding Officer also signed her agreement of the joint venture created to address serious problems besetting the electric and water system of the province.
While BLCI Board of Director Atty. David Tirol, responding to a query from BM Atty. Dionisio Balite praised the Relampagos administration for it’s “brilliant decision” to opt for a joint venture and describe the deal as a “win win solution that solved the problem and earned money for the province”.
UNSTABLE DIVIDEND PAY-OUTS
Balite also praised the PGB’s decision at that time as the “best option” but BM Godofreda Tirol expressed deep concern over the Â mismatch between the amount of paid dividends vis-a-vis expenses for electricity incurred by the province.
Tirol explained that the JVA on electricity is considered an economic enterprise but the dividend from the joint venture is disconcerting considering that the PGB is paying an average of P15M for electricity yet we are paid dividends that is “far, far, short” and a painful loss.
Tirol disclosed that in 2012 the PGB spent P12M for electricity but got only P3M in dividends, in 2013 expenditures of P14M against a dividend of P11M, expenses in 2014 for electricity totaled P17M with a dividend of only P4.5M and the PGB will be spending an estimated P18M this year against an estimated dividend of P10M only.
According to Tirol dividend payments are very important to the relationship between the company and the investor.
Tirol did not sign the JVA in 2000 because the agreement still left much room for discussion which she believed was hastily approved.
BM Abeleon Damalerio requested Provincial Treasurer Eustaquio Socorin to furnished the SP the exact amount allocated for electricity expenses to determine if government facilities located outside Tagbilaran City are covered by the dividends payouts.
According to newly appointed Board of Director Atty. Inocentes Lopez, the PGB started receiving dividends on January 3, 2008 in the amount of P3.375 million at P0.15/share.
Lopez told the SP that expected dividends from 2001 to 2007 were not paid since earnings were plowed back for the upgrading and rehabilitation of the distribution facilities of the electric utility managed by BLCI.
However, former Governor Atty. David Tirol, the longest serving Board of Director of BLCI at thirteen years gave a different explanation on the reason no dividends were paid starting 2001-2007.
Tirol said that one of the conditions in the JVA was for the freezing of electricity rates for the first five years of operation “so everything was pinned down by this provision that affected the financial health of the company”.
Figures furnished by BLCI showed that the PGB received an average of P4.3M for eight years at an average of P0.21/share with the year 2012 the PGB got a high of P11.250M Â at P0.50/share.
However dividends dipped to a low of P1.125M at P0.05/share in 2010 raising questions from BM’s Romulo Cepedoza and Abapo about the erratic highs and lows of dividends paid for the eight year period.
Board of Director Tirol explained that dividends largely depends on the income of the company which is also subject to capital expenditures limiting the amount of dividends paid by the company.
Tirol stressed that falling stock prices as gleaned from the BLCI report hewed to cutting dividends.as shown in the years 2008, 2009, 2010 and 2011 where price/share hovered between P0.05 to P0.15/share.
The exact number of shares held by the PGB in the JVA remained hazy since Tirol admitted he was unsure of the number of shares of the PGB but are based on the 30% of the authorized capital with Socorin assuring the SP that the exact number of shares will be known next session.
However, BM Vicencio Arcamo came up with the figure of 22,500,000 shares by dividing the amount of paid dividend over the price/share for a given year.
Abapo, one of the board members who was part of the SP that deliberated on the JVA in 1999 and was implicated in the graft case filed in the Ombudsman against the JVA asked Lopez if he talked to his predecessor Atty. Victor Dela Serna regarding BLCI operations.
Lopez answered in the negative but assured Abapo that he was getting solid information from Tirol.
Dela Serna was a nine year Director of BLCI before he was replaced by Lopez reportedly because of his scathing attacks against top officials of the provincial government and his acerbic tirades against the JVA.
With a looming legal battle facing the JVA in the Court of Appeals and perhaps reaching the Supreme Court after the denial of the motions for reconsideration of the respondents by the Ombudsman, the present SP has took upon themselves to clarify matters in the interest of transparency.Â (CMV)