A lawmaker has threatened to seek the repeal of the National Grid Corporation of the Philippines’ (NGCP) franchise, citing alleged mounting violations and concerns about its foreign ownership. The move comes after the NGCP faced scrutiny in a recent House hearing.

The NGCP appeared before the House Committee on Legislative Franchises earlier this week during which the panel discovered that the corporation has multiple delayed projects, the costs of which are purportedly being passed on to consumers.

The hearing also highlighted the significant control exerted by Chinese nationals over the corporation, which operates the country’s power grid, as well as NGCP’s non-compliance with public share offer requirements, among other issues.

Santa Rosa Rep. Dan Fernandez disclosed that he will soon move to scrap NGCP’s franchise, pending further violations that the panel may uncover in subsequent hearings.

“I am for the revocation [of NGCP’s franchise], and that’s why we are gathering all their violations so that, at the right time, we can make a motion to revoke their franchise,” he said in an interview. “That’s the best course of action.”

Fernandez explained that one of the primary concerns is the composition of NGCP’s board of directors. The board consists of 14 officials, including four Chinese nationals, and is chaired by Zhu Guangchao, who is also Chinese.

Several lawmakers have questioned how Guangchao was able to secure the highest position despite not representing the majority of shares.

“The operations are conducted by the Chinese, and that is worrisome. The system operation should not be handled by a private entity; it should be handled by the Philippine government,” Fernandez asserted.

“This is one of the reasons why we are reviewing this issue, so the government can retain the authority to manage electricity traffic. Because, aside from the fact that they transmit the electricity from power plants to distribution utilities, they control where it goes, and that compromises our security,” he explained.

The NGCP, a privately owned corporation operating the country’s power grid, is partially owned by Chinese interests. The State Grid Corporation of China (SGCC) holds a 40 percent share in the NGCP, while Synergy Grid of the Philippines (SGP) owns 60 percent, in accordance with the 60-40 foreign ownership rule.

However, lawmakers have expressed concerns about two additional layers of subsidiaries under SGP, which may dilute Filipino ownership.

Santa Rosa Rep. Dan Fernandez disclosed that he will soon move to scrap NGCP’s franchise, pending further violations that the panel may uncover in subsequent hearings.

NGCP spokesperson Cynthia Alabanza, however, maintained that the presence of Chinese nationals on the board does not pose a threat to national security. She argued that Filipino board members still outnumber the Chinese.

Fernandez also contended that NGCP breached Republic Act 9511, which mandates that the company offer at least 20 percent of its shares to the public within 10 years of commencing operations.

NGCP was granted a 50-year franchise under RA 9511, which was passed in 2008.

“Their franchise, under Section 8, requires them to conduct an Initial Public Offering (IPO) within 10 years from January 15, 2009, to January 14, 2019. NGCP’s 20 percent share should have been distributed to the public because they are a natural monopoly,” Fernandez emphasized.

However, he lamented that NGCP did not hold a legitimate public offering and instead used a “share swap methodology,” which he claimed was explicitly prohibited by the law.

He further alleged that NGCP had a private transaction with SGCC, which remains owned by the same people who control NGCP.

The panel will hold another hearing on Tuesday.