NGCP downplays China’s role in power transmission grid

The National Grid Corporation of the Philippines (NGCP) on Wednesday downplayed concerns about China’s role in the Philippines’ power transmission grid, saying the State Grid Corporation of China (SGCC) is merely a “technical adviser.”

While State Grid has a 40% stake in NGCP, the controlling 60% still belongs to Filipino companies, according to National Grid.

Henry Sy Jr.’s Monte Oro Grid Resources Corporation and Robert Coyiuto Jr.’s  Calaca High Power Corporation hold a 30% stake each in NGCP.

“As such, SGCC has only three nominees who sit as members of the NGCP board of directors representing the company and proportionate to its capital shares. NGCP is still majority-owned by local corporations, while SGCC has 40%,” according to National Grid.

The NGCP consortium holds a 25-year concession contract and the 50-year franchise to operate the power transmission network, consists of Monte Oro Grid, Calaca High Power Corporation led by, and SGCC.

“There is nothing to be alarmed about the stake of the SGCC in NGCP as its investment is limited only to being a technical adviser,” said NGCP president and chief executive officer Anthony Almeda.

“SGCC serves only as the technical adviser of the consortium, but the management and the control of NGCP, including its Systems Operation, are exclusively exercised by Filipinos,” Almeda emphasized.

Apart from Sy, Coyiuto, and Almeda, NGCP’s board of directors consists of SGCC vice chief engineer and director general of International Cooperation Department Zhu Guangchao, Philippine Stock Exchange chairman Jose Pardo, Philippine Chamber of Commerce and Industry Inc. chairman emeritus Francis Chua, SGCC Philippine Office director general Shan Shewu, SGCC Africa Office chief representative Liu Ming, engineer Liu Xinhua, and Sagayo Law Offices partner Paul Sagayo Jr.

Lawmakers are calling for a legislative inquiry into the security implications of State Grid’s 40% ownership and potential to control the country’s power transmission grid.

A report by CNN claimed that the Philippine power grid is under the full control of the Chinese government and could be shut off in time of conflict.

Almeda, however, said the Supervisory Control and Data Acquisition (SCADA)—the system that controls the grid—is operated only by authorized Filipino technical experts of NGCP.

“By default, SCADA is disconnected from the Virtual Private Network (VPN); thus, remote users cannot connect to SCADA ... VPN access may only be granted to the Filipino CEO in an emergency situation and only after undergoing a secure and confidential approval process,” he said.

Almeda said the company is willing to work with Congress to allay fears that China would interfere with the backbone of the Philippines’ power distribution system.

“We are happy to welcome our senators and congressmen as well as an independent third party to visit our facilities in order to dispel any security concerns that had been raised these past few days," he said.

NGCP said telecommunication companies like Globe and Smart use NGCP facilities via co-location agreements.

Such agreements with NGCP allow a third-party to piggy-back on its existing facilities except tagging into or using the grid’s fiber optic cables.

“NGCP declares all earnings from related businesses and uses the same to lower transmission rates in full compliance with the provisions of EPIRA and Concession Agreement,” Almeda noted.

The NGCP recently announced P463 billion in fresh capital to modernize and expand the power grid in the next 10 years. —VDS, GMA News