May go signal na! SC allows PSALM to post guards at Napocor HQ

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The Supreme Court allowed the Power Sector Assets and Liabilities Management Corporation (PSALM) to post security guards at the National Power Corporation Mindanao Generation (NPC MinGen) headquarters amid dispute by a losing bidder for the service contract.

In a recent 10-page decision, the SC 3rd Division said the Court of Appeals (CA) “blatantly erred” when it issued on June 9, 2010 a temporary restraining order (TRO) stopping PSALM from completing its procurement of security services.

PSALM was only roped in to the dispute that was originally between NPC and San Miguel Protective Security Agency (SMPSA).

NPC was originally in charge of procuring security services, and its bids and awards committee disqualified SMPSA as a bidder for failing to meet the equipage requirements.

SMPSA secured an injunction from the Lanao del Norte Regional Trial Court on February 17, 2009, which was made permanent on August 17 that year. NPC then elevated the dispute to the CA.

The NPC on March 9, 2009 struck an agreement with PSALM – the government corporation in charge of privatizing its assets – to operate and maintain the MinGen compound.

PSALM proceeded to hold its own bidding for the security service and was supposed to award it to a winning bidder, until the CA issued a TRO in SMPSA’s favor.

Court records showed SMPSA general manager Francisco Labao did not furnish PSALM a copy of his motion for a TRO.

The High Court, however, said it was wrong for the CA to slap PSALM with the TRO because it was not a party to the dispute between NPC and SMPSA.

It said Section 49 of the Electric Power Industry Reform Act “expressly created PSALM as a corporate entity separate and distinct from NPC.”

The decision stated that under the operation agreement, PSALM “was not acting as the agent of NPC, but in its interest as the owner.”

It also pointed out that Labao should have been well aware that PSALM became the owner of all NPC power generation assets as early as mid-2001. Thus, he should have impleaded PSALM at the onset in the RTC case.

Since PSALM was not a mere transferee of NPC’s rights, “no order or judgment rendered in the action between SMPSA and NPC could bind PSALM,” read the decision penned by Associate Justice Lucas Bersamin.

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