THE Baguio City Council has finally put an end to the memorandum of agreement (MOA) between Kaltimex Energy Philippines Inc., and the City Government after three years.
In 2018, the city under then-Mayor Mauricio Domogan sued Kaltimex for failure to comply with the MOA’s provisions and obligations.
In February of 2020, the current administration under Mayor Benjamin Magalong and Kaltimex settled upon a compromise agreement, whereupon Kaltimex paid damages worth P13.6 million, as well as reimbursing the city’s P605,000 filing fee for the suit. The city then issued Kaltimex a Notice to Proceed, allowing the company to once again pursue the operation of the city’s power plants in Asin.
Kaltimex however once again failed to comply with the terms of both the MOA and the compromise agreement.
The city’s Committee on Laws, Human Rights, and Justice pointed out that Kaltimex failed to take possession of and operate the Asin power plants in compliance with the compromise agreement, and also stated that Kaltimex has failed to pay both its rent and the city government’s share of income since 2017.
The committee’s report stated, “Even assuming but without conceding that KEPI entered the subject premises within the required period, it failed to pay the current monthly rentals to the city government every third week of each month without any extension, as stated under Item D.3. of the MOA.”
Kaltimex’s failure to comply with the agreements and the provisions of the MOA, as well as failure to pay, have caused the city to take losses.
Kaltimex’s dues, according to the financial report, have since ballooned to P86,325,471. At the same time, reports from the Commission on Audit revealed that the city has been incurring losses instead of receiving income due to expenses in maintaining the facility and paying wages for security personnel.
The committee also questioned whether Kaltimex is financially capable of handling the rehabilitation and operation of the power plants, and in conjunction with the other findings of the committee, have since decided to terminate the contract.
