NGCP: China’s shares in grid corporation won’t pose nat’l security threat; senators disagree

The 40 percent ownership of State Grid Corporation of China in the National Grid Corporation of the Philippines (NGCP) won’t pose a national security threat, the NGCP assistant corporate secretary told the Senate energy committee Wednesday.

Ronald Dylan Concepcion made the statement after Senator Raffy Tulfo, panel chairperson, asked him if he agrees with the concerns of the intelligence community that China’s shares in NGCP will put the country’s security at risk as there are reports that the China’s state grid firm can access the energy transmission facilities remotely.

“Do you agree na it poses a national security threat itong State Grid of China na 40 percent ang nagmamay-ari at ayon po sa intel report na natanggap ko, e remotely the National Grid of China, Chinese government makakapag-access sa ating national grid. So pwede po tayong isabotahe just like what happened to Russia and Ukraine lalo na po sa nangyayaring sigalot sa pagitan ng China at Philippines bec of the West Philippine Sea?” Tulfo asked.

In response, Concepcion said “that’s not correct” and explained that the NGCP facilities are manned by Filipinos.

But Tulfo and Senator Risa Hontiveros refuted Concepcion’s statement.

“Hindi po madaling sabihin na hindi national security threat na may ibang bansa, na state-owned enterprise na may obligasyon na mangolekta ng impormasyon o intelligence at ibigay sa kanilang gobyerno sa Beijing tungkol sa ating bansa, maging tungkol sa ating gobyerno, ang isang bansa na napaka-hindi kaibigan ang pagtrato sa atin sa karagatan sa West Philippine Sea, isang bansa na nando’n din sa ating telecommunications industry at lalo na sa ating national grid para sabihin natin na hindi national security threat ‘yon. Hinding hindi po tama ‘yon, Mr. Chair. Maling mali po ‘yon,” Hontiveros.

Tulfo reiterated the need to return NGCP’s ownership to the Philippine government, specifically to the National Transmission Corporation and not with China’s state grid and private firms.

Concepcion maintained that China cannot remotely control NGCP’s facilities, saying former National Security Council chief Hermogenes Esperon Jr. had already inspected their facilities around 2019 or 2020 to verify this claim.

“Even the National Security Council has already visited our premises and they have made actually an inspection…It was then-National Security [Adviser] Esperon who himself went to our head office as well as the regional offices to inspect with regard to the report at that time that there was a remote control that can be accessed by China,” Concepcion said.

The NGCP official did not give further details on NSC’s findings based on their inspection due to confidentiality, but Tulfo mentioned that Esperon had said in the report that there was “vulnerability” in the system.

Tulfo pointed out that Esperon only inspected the facilities in the NGCP and not the State Grid Corporation of China.

“Until na na-verify mismo sa China, sa State Grid of China na malinis at wala silang remote access, I won't believe whatever you’ll tell us na hindi possible 'yon. I will still believe na meron pong access remotely, kaya po ng State Grid of China kung gugustuhin na isabotahe ang ating national grid na isang araw paggising natin, eh baka hindi na tayo Republic of the Philippines,” Tulfo said.

Hontiveros also recalled Esperon’s previous statement in the Senate where he supposedly said that the Philippines has no cybersecurity strategy yet.

Chinese characters

Meanwhile, Concepcion explained that the manuals and instructions for the NGCP equipment in their substations were written in Chinese characters because their equipment were acquired from a Chinese provider.

“The instructions to that system were in Chinese originally but also they have English translation because of course our Filipino engineers have to go through training for that. So meron pa rin pong English na translation,” Concepcion said.

Tulfo then asked Concepcion to “get rid of these Chinese characters” because it is “insulting.”

“Andito kayo sa Pilipinas at Pilipino ang nagpapatakbo, kung totoo talagang mga Pilipino e bakit kailangan pang may Chinese character. For what?” he said.

Concepcion said that the NGCP would follow Tulfo's suggestion.

Asked if they have Chinese employees, Concepcion said there are none and the only Chinese in the corporation are the three board members.

“The only Chinese that are in the country that are connected to NGCP are three and these are the members of the board. They sit in the board, and they represent the shareholdings of the State Grid Corporation of China,” he said.

The lawmakers also urged the NGCP to provide the documents related to the claims that 95 percent of NGCP’s revenues proceed to dividends and only five percent were allocated for investments after Concepcion said he is not privy with these pieces of information.

On the reports that the shareholders from State Grid Corporation of China can override or veto the decision of the majority, Concepcion said that it has not happened yet.

But Concepcion did not deny that it is possible as the remaining 60 percent of NGCP shares were owned by two companies and each firm will technically have 30 percent shares.

Tulfo also grilled NGCP for allegedly prohibiting Transco to inspect its facilities.

“That’s not accurate that they are not welcome. What we have with Transco is we need to coordinate with each other for these visits. What happens is that some Transco personnel go to our plants unannounced,” Concepcion said.

The NGCP is implementing a protocol for Transco to coordinate with them before conducting an inspection, he added.

Donna Caloza-Aleria of Transco confirmed that the NGCP did not allow some of their subcontractors’ personnel.

They were allowed to inspect NGCP’s existing transmission assets but they are prohibited to check the new projects, the Transco official added.

At the early part of the hearing, Senator Grace Poe, chairperson of the Senate committee on public services, reminded the NGCP that their congressional franchise is a privilege which the Congress may revoke anytime.

“Sa oras na hindi ito magampanan nang maayos, maari itong bawiin…We want to determine if NGCP has remained faithful to its commitments under its franchise and ascertain if there are any violations and from there, we will decide on our next steps with the public in mind and with the assurance that there will be no hindrance to the continuous provision of electricity in the Philippines,” Poe said.

The Tulfo-led investigation in the Senate got the blessing of no less than President Ferdinand “Bongbong” Marcos Jr., the Presidential Communications Office said in a statement earlier in the day.

The PCO said the President expressed that the government will take control of the NGCP if needed.

Last Monday, Tulfo met with Marcos to raise the supposed control of China over the NGCP. — RSJ, GMA Integrated News