Rod Kapunan

“It was a criminal conspiracy.”

The mothballing of the Bataan Nuclear Power Plant was a criminal conspiracy by a foreign-installed government to financially defraud the government. It wasa conspiracy committed by a government that claims to be holier-than-thou to financially discredit Marcos. Maybe we can say it was not the original plan of Marcos to put up a nuclear power plant but was suggested to him by the very people who will work to derail the project that culminated in his ouster from office.

The idea supposedly came from Eugenio Lopez, Sr., who would later become his arch-enemy. Lopez conveyed it to a loyal political ally, Senator Lorenzo Tañada, who worked for the passage of R.A. No. 5207, or the Atomic Energy Regulatory and Liability Act of 1968 only to inexplicably call his sponsored law “a project of monumental corruption, greed and folly.”

Sensing that Marcos intended to push through with the project that would allow the country to make a great leap forward, he issued P.D. No. 1484 amending certain sections of R.A. No. 5207 titled “an Act providing for the licensing and regulation of atomic energy facilities and materials, establishing the rules on liability for nuclear damage”, on June 11, 1978. It was the National Power Corporation that negotiated the contract to purchase the nuclear power machinery and equipment at a base price of $329 million. Later, it was decided that Westinghouse would also design the nuclear steam supply, construct civil works, erect and test electro-mechanical equipment, manage construction and provide training services. The total cost for the equipment and services amounted to $562 million, at a September 1974 base price.

Since the delivery of the equipment and services would take about seven years, the base price was subject to escalation clause. Interest during the construction period added a substantial amount to the total cost of the project. The financing charges were estimated at $266 million.

There were actually two sources for the project loan, which originally amounted to $1.109 billion. For the purchase of nuclear technology (equipment, materials, and fuel), NPC obtained a loan of $644.4 million (or 59.44 percent of the total cost) from the US Eximbank, the only financing institution authorized by the US government to purchase nuclear technology.

Besides paying Westinghouse, NPC also had to undertake site selection and preparation, fuel procurement and contracting for fabrication and shipment, transmission facilities, insurance, etc., all of which were estimated to cost $166 million.

Based on the original design, the estimated total cost for the project until its completion in 1983 was $1.109 billion, broken down into foreign exchange costs of $833 million, and costs worth $266 million. All in all, NPC incurred additional project costs estimated at $844 million, broken down into the following components:

Safety upgrades($100 million), cost escalation ($292 million), financing charges ($373 million), other contract scope changes ($79 million).

The hypocritical foreign-installed Aquino government ranted without let up about the corruption in the Marcos administration, yet her cabal in the opposition kept on introducing modifications to the project to allegedly ensure safety – until the cost ballooned to $2.3 billion. They coursed their suggestion through their political handlers who pretended to welcome them as fruitful contributions.

The estimated project cost then skyrocketed to $1.95 billion. As a captive client, NPC had to continue servicing the loan obligation. To quote Velasco: “Although the government’s basis for assuming NPC loans seemed reasonable (i.e., the mothballing of the nuclear power plant deprived the company of potential revenues from which to repay its obligations), nobody expected Mrs. Aquino to honor the nuclear power plant’s debts after claiming the project was tainted by fraud and corruption.

Despite calls by some of her closest supporters not to pay “fraudulent” debts, Mrs. Aquino chose to play safe and promised the country’s creditors that her government would “pay every cent” of the country’s foreign debts, including the nuclear plant’s. What made the situation more awful was that Mrs. Aquino, in the eyes of the Western world, was hailed as the champion of freedom and democracy just as President Marcos was vilified as dictator.

 It is said that the government paid out $460 million (P9.5 billion at the exchange rate of $1 = P21), or between $300,000 and $375,000 a day in debt service, from 1987 to 1989. Payments were made at a time when the economy was experiencing minimal to negative growth.

If we are to take the decision of President Cory Aquino to forego the operation of the BNPP, the next logical step should have been for her to discontinue the payment of loan. It was the escalation clause, the interest rate, the currency adjustment clause that buried NPC deep into the game engineered by hustlers on Wall Street.

When Mrs. Aquino ordered the full payment of the loan knowing she would not allow it to operate, she committed the most serious act of betrayal of public trust. People were made to believe that she was true to her word, that Marcos was corrupt to the bone that the Filipino people will ultimately pay a total of $2.3 billion about to be flushed into the septic tank. Clearly, she used her position as the US-installed president to commit the unprecedented criminal act of misappropriation and breach of public trust, for clearly she exercised her power without citing any valid reason to justify her action. It was evident she was protecting the interest of Westinghouse than of the Filipino people.

Interestingly, the closure of the BNPP was based on two serious allegations. One, that it was graft-ridden which is the reason why the original price of $600 million ballooned to $2.3 billion. Two, the plant stands on unsafe grounds and had defects in its construction.

But before any of these allegations were brought to court for justice to be meted out on Marcos and his alleged cronies, and to justify the withholding of payment or to demand damages, there should have been a trial. Instead, Mrs. Aquino issued executive orders almost immediately after she was installed to office by coup d’ etat pre-empting any possibility of hearing the allegations of corruption and shabby construction of the project.

First, she issued EO No. 20 on June 19, 1986 placing the offices, agencies and corporations attached to the Ministry of Energy under the administrative supervision of the Office of the President. This explains why Cesar Buenaventura, despite being identified as the unofficial energy czar, never allowed himself to be appointed secretary of energy; his main agenda was to recommend the abolition of the Ministry.

Second, EO No. 55 issued on October 1, 1986, “transferring to the national government the Philippine nuclear power plant I, its equipment, materials, facilities, records and uranium fuel, providing for the assumption of the remaining foreign loan obligations of the NPC with foreign lenders under the loan contracted by the NPC and guaranteed by the Republic of the Philippines and of the peso obligations incurred to finance the construction of said nuclear plant by the national government”. This means that the BNPP ceased to operate or was mothballed, not by any court order, but by mere EO. Despite that, the holier-than-thou people insisted her EO was democratic.

The mothballing of the Bataan Nuclear Power Plant Part II

Rod Kapunan

“It was a criminal conspiracy.”

Third, EO No. 98 issued on December 18, 1986 modified EO No. 55. This order transferred to the national government the nuclear power plant, its equipment, materials, facilities, records and uranium fuel; and provided for the assumption of the remaining foreign loan obligation of the NPC guaranteed by the Republic of the Philippines and of the peso obligation incurred to finance the construction.

Fourth, EO No. 358 issued on June 2, 1989 revoked the designation of the administrator of the Export Processing Zone as a member of the Presidential Committee on the Nuclear Power Plant. Even this insignificant aspect of representation was revoked, indicating a malicious intention to totally get rid of the BNPP.

These executive orders issued by Mrs. Aquino were treated as permanent injunction to forbid the BNPP from operating the plant though no court issued an injunction to prevent it from operating on the basis of corruption and/or finding that the plant was defective, unsafe or constructed on an earthquake fault line, the same charges they labelled against the Marcos government.

Instigating to cancel the contract could make a sweet vengeance against Marcos and cause the Filipino people to lose $2.3 billion worth of projects. Cesar Buenaventura, Rene Saguisag, Wigberto Tanada, Jovito Salonga and the remnants of today’s yellow-bearing opposition were citing allegations of defects in its construction, alleged use of substandard materials, that the site is located on an earthquake fault-line, etc., but never filed a complaint of their allegation to an independent arbiter to validate that BNPP pose danger to the safety of the Filipino people.

It was Westinghouse International Project Corporation (WIPCO) that designed and implemented the plant. A valid judgment could have been the basis for the Philippines not to pay and/or conversely demand from Westinghouse payment for damages. Rather, Mrs. Aquino took all the arguments of those opposed to the project, which means she acted with malice to justify her raving hatred of Marcos. What Mrs. Aquino did was a case of economic sabotage, for clearly she and her cabal derailed the country’s goal to attaining energy self-sufficiency.

Whether it is graft and corruption or about the safety of the plant, these conditions must be proven. Worse, after Marcos was ousted, the yellows did not file a case against him based on their allegation that the contract was graft-ridden to send him and his alleged “cronies” to jail.

Instead, the Aquino government continued paying the cost while ranting against it for fear that their foreign handler might slap them for badmouthing Westinghouse. The legacy of vengeance continues to this day even after the moronic Noynoy Aquino administration fully paid the amount. As founding Energy Minister, Geronimo Velasco observed: “… we had to pay the equivalent of $155,000 a day until 2018.”

It was Alejandro Melchor, the then executive secretary of President Marcos who took charge and signed the contract for the government that prohibited us from acquiring even an ordinary screw from other suppliers except from Westinghouse.

If Mrs. Aquino honestly believed there was corruption, it was her duty to stop the project and order a stop payment or at the least demand a reasonable settlement and/or discount for the $2.3 billion project. Many could not understand why the US government spearheaded the questioning about the safety of the plant when supposedly Westinghouse, an American company, guaranteed its safety.

The insistence by the Cory Aquino government in paying to the last centavo is the fear the company might just blow the whistle that to discontinue payment or demand for damages must equally mean the government must prove corruption that resulted in the horrendous overpricing of the project or that there were serious defects in the construction and location of the plant. Alas, none of their allegations were proven except for their ranting as if they would be infected by some kind of skin disease if the plant is allowed to operate.

The technical blueprint of the plant installed by Westinghouse indicates that it is not easy to produce an atom bomb as some demagogues in the opposition would hallucinate. The model sold by Westinghouse to NPC is one that could not easily be converted to enriching plutonium, the main ingredient in the production of atom bombs.

But the US and their lapdog in the opposition never ran out of alibis in wanting to swindle the Filipino people. Their goal was to discredit Marcos by sowing fear that the plant is a ticking time bomb; that either it will explode like what happened in Chernobyl in 1986 or result in nuclear meltdown like that thriller movie “China Syndrome.” We were made to worry about our safety but not of the $2.3 billion that Mrs. Aquino flushed into the septic tank.

In fact, the EOs issued by Mrs. Aquino prohibiting the operation of the BNPP were not even legislated laws but mere orders issued right by her after the restoration of her bogus democracy. Many gullible lawyers accepted the EO impressed by her “saintly” decision not knowing that it was the swindling of the $2.3 billion she committed against the Filipino people.

NPC had to service a $2.3 billion plant that according to PNOC President Thelmo Cunanan did not produce a single watt of electricity. The opposition highlighted the original contract signed in 1974, alleging that it cost only $600 million but ballooned to $2.3 billion. The opposition however did not mention that US embassy officials and Westinghouse insisted on building luxurious amenities like rest houses for officials of the project, a swimming pool, a tennis court, a hotel for visiting guests, and an emergency hospital in case of an accident. All added to the cost not to mention that officials assigned to oversee the operation and maintenance of the plant extravagantly billed the government.

The yellows failed to make a simple mathematical computation that even if NPC would give each of the employees a separation pay of P50 million, the amount of $2.3 billion could not be exhausted, assuming NPC would pay each to the last janitor. If one would divide the more than $2 billion converted at P50 per dollar, that would amount to more than P200 billion, enough to leave NPC an excess amount.

Marcos had to bear all the prevarications for obviously there was no way he could do to stop them. He can only wait for the final verdict of history, which today is slowly bearing the truth that the Aquino government flushed to the septic tank $2.3 billion worth of the project upon the advice of one suspected as a foreign operative. The sad part is that those people disguised as clowns of our make-believe democracy were operating behind the cloak of these non-governmental organizations fully funded by US intelligence services to purposely discredit the Marcos administration.

Our full payment of the loan was the main reason that bankrupted NPC, it being the principal guarantor of the loan. NPC failed to generate the revenue due to the non operation of the BNPP, which is the reason why it ended up inextricably mired in debt. Napocor had no recourse but to sell the premier income-generating institution. NPC was first chopped to pieces as seen today by the takeover by NGCP of the country’s transmission grid only to stand as the second most costly electricity per kilowatt hour next to Japan due to additional cost for wheeling charges.