Lanao del Sur power cooperative is best argument against these dinosaurs

Unbelievable!

One could use more colourful superlatives to describe the Lanao del Sur (LASURECO) power cooperative, but it is not necessary. The bare facts are stranger than fiction. Consider these:

·         LASURECO has racked up debt of about P3.7-billion.

·         It was considered National Power Corporation’s (NPC ) most delinquent customer with outstanding debt at P2.28 billion as of June 2007 before it was put under management by NPC and the National Electrification Administration (NEA)

·         LASURECO’s systems losses had reached a staggering 63% before it was contained down to 30% by NPC and NEA, when the allowed losses for cooperatives should be only up to 14% which is already very generous

·         Its receivables collection rate had been a dismal 8%

·         It has not been paying its suppliers for years

·         It could not even pay its employees on time, if at all

·         It has failed to install an electrification project funded by NEA

The situation was so bad that NPC and NEA intervened in the cooperative’s operation in November 2007. Since then, its financial situation has improved a bit. At least it can now pay its current obligations to NPC, according to reports.

It has also started paying P1 million monthly for its P107 million it owes the National Electrification Administration (NEA). It should take the cooperative nine years to pay that obligation if there were no interests.

Well, at least NEA is getting some of its money back.

Before LASURECO came into our radar screens, we thought that the situation with the Albay Electric Cooperative (ALECO) was already the worst.

Save for a very few exceptions, electric cooperatives have not been performing well and are woefully managed.  Many of these dinosaurs have been in existence for long, and they should have been declared extinct eons ago.

Our policy makers should have a definite strategy to phase them out as the original business model for these creatures is no longer in tune with modern times.

One could start selling off the bigger of these power cooperatives and make them professionally managed corporations.

Why it is difficult to achieve, we can only guess.