Oil Report

Philippines ponders reopening Marcos-era nuclear plant

MANILA, March 3 (Reuters) - The Philippines’ only nuclear power plant cost more than $2 billion and has never been used, but moves to reopen it are sparking fresh protests against a symbol of corruption during dictator Ferdinand Marcos’s rule.

Congressman Mark Cojuangco, son of prominent Marcos ally Eduardo Cojuangco, is seeking $1 billion in government funds to revive the 620-megawatt plant in Bataan province, northwest of Manila, to meet an expected rise in power demand, he said.

“I am willing to withdraw my proposal if it could be proven that it would be hopeless to rehabilitate and safely operate the plant,” Cojuangco told Reuters, adding the country desperately needs additional power.

Hundreds of activists have been holding almost daily protests outside the House of Representatives as lawmakers deliberate on funding Cojuangco’s proposal.

Groups from environmentalists to the Catholic Church argue the plant is unsafe and will cost too much to rehabilitate and run.

Critics also say reviving the plant could end up being advantageous to the Cojuangco family because of the clan’s interest in the power sector.

Marcos ordered the Bataan nuclear plant built in 1976 in response to an energy crisis, convinced nuclear energy was the solution to the Middle East oil embargo of the early 1970s.

Construction was completed in 1984 but the facility never produced a single watt of electricity after it was declared unsafe and inoperable because it sits on a major earthquake fault line and lies near the Pinatubo volcano, which was dormant at that time.

Pinatubo erupted in 1991, but there was no effect on the Bataan plant, 70 km (45 miles) away.

Loans taken to build the unused plant were finally paid off in 2007, more than two decades after its construction. The government spends 30-40 million pesos ($610,000-$810,000) annually for maintenance and salaries.

“I just need to convince my colleagues to fund this project,” Cojuangco said, adding he was sure of securing 196 votes from the 238-member lower house.

The energy panel of the lower house, chaired by the son of President Gloria Macapagal Arroyo, has already approved funding for the project. A faction of Cojuangco’s political party is aligned with Arroyo.


The Department of Energy created a task force in 2007 to study nuclear power as a long-term alternative to imported fuel oil, which accounts for over one-third of the country’s energy mix.

State-owned National Power Corp, the country’s biggest power producer, entered into a memorandum of agreement with Korea Electric Power Corp (KEPCO) to conduct a feasibility study on the possible reopening of the Bataan plant.

The study is expected to be completed in January 2010, said Rolando Bacani, general manager at KEPCO Philippines.

KEPCO, the power monopoly in South Korea, operates 20 nuclear reactors there, with a total capacity of 18,000 megawatts.

The structure of the Bataan plant is identical to KEPCO’s Kori 2 that has been in operation since 1983, said Bacani, although there have been many changes to the Korean plant since.

Proponents say nuclear energy should be seriously considered in the Philippines.

“Nuclear energy is a reality. People have to get over Three Mile Island and Chernobyl, as if every nuclear power plant was a ticking time bomb, when in fact they’re not,” said Scott Harrison of risk consultancy Pacific Strategies and Assessments (PSA).

But Giovanni Tapang, head of an activist group opposed to reopening the Bataan nuclear plant, said the country has vast alternative energy resources such as geothermal and solar energy that would be much safer and reliable than nuclear power.

“The Bataan nuclear power plant is defective, almost obsolete and is not safe to operate,” Tapang said in a statement.


Even Church leaders have joined growing opposition to the reopening of the nuclear facility. The influential Catholic Bishops Conference of the Philippines has said the plant should be dismantled because “multiple risks and the possibility of corruption outweighed dreamed benefits”.

Cojuangco's father, also called Danding, is chairman of San Miguel Corp SMC.PSSMCB.PS, Southeast Asia's biggest food and drinks company that is selling out of its core business and moving steadily into the utilities sector.

Danding was key ally of Marcos and fled with him into exile in 1986 after Marcos was overthrown.

Last month, San Miguel sold more than a 40 percent stake in crown jewel San Miguel Brewery SMB.PS to Japan's No. 2 brewer Kirin Holdings 2503.T.

In October, it agreed to acquire 27 percent of Manila Electric Co MER.PS, the Philippines' largest power distributor, and has an option to take a majority stake in oil refiner Petron Corp PCOR.PS. Petron announced last week it was also diversifying into power generation.

PSA’s Harrison says the Cojuangcos are clearly eyeing the Bataan nuclear plant.

“I’m sure that’s the basis for it. Otherwise it doesn’t make any sense why Danding’s son would be the one to introduce this bill. It obviously reflects the family’s interest in further diversification into the utility sector,” he said.

But the younger Cojuangco was quick to dismiss the speculation.

“I am against any move to privatise the operation of the Bataan nuclear power plant,” he said.

“The people would be assured of much cheaper power rates if the government would run it. I would not allow any foreign or local company, including San Miguel, to operate it.” (Editing by Valerie Lee)