The NGCP was also accused of owing the government P6 billion in unremitted earnings since it started operation in 2009.

The Philippines’ power grid is currently at the mercy of China — raising a very serious national security issue, if industry sources are to be believed.

This was revealed by a position paper obtained by Daily Tribune from reliable sources, citing the huge stake — 40 percent at that — of State Grid Corporation in the National Grid Corporation of the Philippines (NGCP).

State Grid Corporation is owned by the Chinese government.

The documents noted that immediately after the NGCP took over the national grid in 2009, one of its first projects was to replace the still functional System Operator’s Supervisory Control and Data Acquisition and the Energy Management System.

The systems were changed with China’s “NARI” brand, whose operational manuals are written in Chinese. No Filipino engineer could understand them and the level of their competency was limited only to the use of the equipment.

Them was also cited that the current system relies heavily on information and communication technology for automatic and remote monitoring and control of power facilities.

“In case where the local engineers could not troubleshoot the protection and control relays, only Chinese engineers in China or anywhere in the world, given the password, can troubleshoot, operate and control the equipment in the Philippines,” the Tribune-obtained documents stated.

“With the control system that only the Chinese fully understand and can manipulate remotely, the Philippine national power and cyber security is currently at very high risk,” it disclosed.

The documents showed that the operations and maintenance agreement with NGCP rendered the government “practically dependent on the NGCP from development, operation and control of the national grid.”

Earlier, Daily Tribune reported that the 25-year concession agreement and 50-year franchise of NGCP were onerous and disadvantageous to the government.

The NGCP was also accused of owing the government P6 billion in unremitted earnings since it started operation in 2009.

Under the concession agreement between NGCP and the Power Sector Assets and Liabilities Management Corporation and the National Transmission Corporation , the government surrendered and turned over the transmission business, including metering services and system operation.

The NGCP was given the responsibility to prepare the Transmission Development Plan; design, construct and finance all transmission expansion, rehabilitation and reinforcement projects; operate and maintain all transmission facilities and undisposed sub-transmission assets; act as system operator including ancillary services to maintain grid security; and provide metering services for the electricity market.

“For national security considerations, it has become critically necessary for the government to recover the transmission business from the concessionaire NGCP,” the documents recommended.

“The system operation function must be prioritized with or without tension between the Philippines and China at the West Philippine Sea,” it added.

The Philippines and China are entangled in a dispute over some islets and reefs in the West Philippine Sea or South China Sea.

The tension went up after former President Benigno Aquino III filed a formal complaint against Beijing before the United Nations’ Permanent Court of Arbitration. The court in 2016 ruled in favor of Manila.

Upon the assumption of President Rodrigo Duterte, he adopted an independent foreign policy that resulted in closer ties with China as he shelved the tribunal ruling.

From almost zero economic exchanges with Beijing during the Aquino administration, China became an active economic partner of President Duterte, particularly in the government’s massive “Build, Build, Build” infrastructure program.

The documents cited the Constitution and the provisions of the concession agreement as basis for the government takeover.

Under Article XII Section 18 of the 1987 Constitution, or the National Economy and Patrimony, it stated that “the state may, in the interest of national welfare or defense, establish and operate vital industries and, upon payment of just compensation, transfer public ownership utilities and other private enterprises to be operated by the government.”

It added that the government can assert Section 13.03 or the “No Fault Event” of the concession agreement or the more expensive Section 13.02 of the “Government Default.”

“In both options, the recovery by the government of the SO (system operation) function and business does not require consent from the concessionaire,” the documents stated.

The Daily Tribune has been contacting the NGCP for its side of the issues regarding its concession agreement and franchise but to no avail.