₱21M wasted in ‘scrapped’ energy project – Sen. Gatchalian

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Metro Manila (CNN Philippines, September 22) — More than ₱20 million down the drain as the Philippine National Oil Corporation (PNOC) called off a port development project in Batangas to replace it with a new one, Senator Sherwin Gatchalian said Friday.

“It’s a shock to me,” Gatchalian said as he led a Senate finance subcommittee’s hearing on the proposed ₱1.96-billion corporate budget of the PNOC.

Gatchalian, who also sits as vice chairman of the energy panel, said PNOC already spent ₱21 million to conduct a feasibility study for the Energy Supply Base Port Development Project in Mabini, Batangas.

It was supposed to upgrade and expand a private commercial port to provide pier and warehousing facilities, cargo handling, and other services for the energy industry.

Gatchalian said it was previously found to be feasible, resulting in a multiyear budget of ₱1.6 billion.

“We are now going to ignore the ₱20-million feasibility study, and on top of that we are now breaching the multiyear allocation of ₱1.6 billion by another ₱500 million to about ₱2.1 billion… It’s quite drastic,” Gatchalian said.

“₱21 million is ₱21 million, we’re just going to throw it away," he added. "Sayang naman [What a waste]."

PNOC President and CEO Oliver Butalid said the new project — the Offshore Wind Power Integration Port — was the result of “very well-attended consultations” with experts and stakeholders.

“The design presented as envisioned in 2019 cannot be responsive to the needs of this sector so it was the decision of the board,” Butalid said, referring to the PNOC Board of Directors chaired by Energy Secretary Raphael Lotilla.

“It was impossible to foresee that there would be such a fast-growing industry such as offshore wind,” Butalid also said, adding that the board made the decision last month.

Gatchalian said he needs more details about the new project, including the funding requirement, considering he has to defend the PNOC’s budget in plenary.

“Baka maging bottomless pit ito [It might become a bottomless pit], every year ₱1 billion," he said. "By the time we know it it’s already ₱10 billion."

Butalid could not give a ballpark figure but admitted it will "cost more."

Gatchalian iffy with ‘new direction’ of PNOC

Gatchalian also said that it looks like the PNOC is having a “new direction,” expressing worry that maybe “after one year, when I start hearing your budget again, nothing is going to be achieved.”

During the hearing, the PNOC presented its new vision and mission statements, as well as its six flagship initiatives in 2024 that will include participating in the hybridization of off-grid areas, installment of rooftop solar photovoltaic systems for government entities, and creation of electric vehicle charging stations.

“I feel like it's going into many things, that it's losing its core reason why it was created in the first place, which is to find more oil and gas and achieve energy security with those discoveries,” the senator said.

Butalid said the PNOC wants to focus on areas that will be able to deploy additional capacity in the short and medium terms as a support to the goals of the Department of Energy (DOE), saying investing in oil and gas is “quite long-term.”

He also added the state-run firm is “willing” to put its resources into supporting offshore wind.

Energy Undersecretary Sharon Garin said the DOE envisions PNOC “to expand the technology, not abandon oil and gas,” as there are new developments in the power sector.

“It’s probably the only GOCC (Government-Owned and Controlled Corporation) we have under the DOE that might have the capability or the mandate to develop those,” she added.

“I respect your corporate decision. DOE sits as the chairman, I respect that. But then again, I will be looking at what have you achieved after one year,” Gatchalian said. “That’s the most important because I’m accountable to our constituents on the money that is being spent in all of these projects.”

CNN Philippines digital producer Jelo Ritzhie Mantaring contributed to this report.