HOW THE BATAAN NUKE POWER PLANT BANKRUPTED THE PHILIPPINES
The mothballing of the Bataan Nuclear Power Plant had tremendous, far-reaching consequences that have yet to be fully accounted for and calculated, or, for that matter, grasped. How, for instance, did it contribute to the economic tribulations and decline of the Philippines? When President Ferdinand Marcos pleaded to President Cory Aquino, his successor, to push for the operation of the plant he built and not waste it, he did so realizing the extremely detrimental repercussions of mothballing the plant. The facility after all was a most-ambitious project bankrolled through an enormous foreign loan which was to be paid back by the government in thirty years. Marcos’ pleadings fell on deaf ears.
By not operating the BNPP, we have actually sacrificed and forfeited all potential benefits, including revenues, direct and indirect, arising from it— revenues which should have paid for the massive monthly installments. Servicing the debt without these revenues, the national treasury was practically leaking dry by as much. By how much, let us attempt at a very rough estimate.
I was googling for some official data but I could not find them, like how much interest rate was paid, terms of payment and other relevant data. All I got is some facts from Wiki: It cost $2.3B payable in 30 years. Using an online loans calculator at default 4.5%, we calculate a monthly payment of $ 11.7M. Assuming our base figures were spot-on, or within reasonable range, it would mean that we were actually paying the creditors that much every month, roughly $ 388,000 a day— for thirty years. So how much did we pay our creditors in nominal (not adjusted to inflation) amount for thirty years? $4.2B!
Meaning, not only did we throw away all potential benefits, we also created a sinkhole through which our financial resources poured out. Thus, the first tragedy of the Bataan Nuclear Power Plant is that of Filipino taxpayers paying a humongous bill of $4.2B FOR NOTHING! Yes, $4.2B FOR NOTHING! That is practically equivalent to being robbed of $4.2B!
The second tragedy is this: imagine what the $4.2B could have done for the economy if it were utilized instead for, say, upgrading and expanding infrastructure over this long period. As it happened, government spending on vital sectors was severely constrained due to a huge debt service obligation eating up on the national budget, the bulk of which related to the nuke plant. In fact, the present worsening malfunction in government service could well trace much of their origin to inadequate and decrepit infrastructure that was a result of a buildup in backlog in unfunded essentials over the years.
The third tragedy is in having forever lost that one golden opportunity for developing a seamless energy development program that would have established a dependable power supply base, kept power rates at low levels and reduced dependence on imported fuel. Sayang.
What’s more, freezing the plant predictably created an immense gap in energy supply which subsequently engendered a branching chain of adverse effects, short term and long term. It is doubtful if these consequences were ever truly and seriously pondered upon before the decision was arrived at. Because power plants take many years to build, replacing the breach left by it was by no means forthcoming, thus day-long blackouts came rolling in like a scourge, distinguishing the last years of the first Aquino administration. How much damage the blackouts wreaked on the economy, we could never truly measure.
Fidel Ramos came to the rescue upon assuming the presidency in 1992. It was kapit sa patalim as expected, the result being exorbitant contracts with independent power producers by which we are bound until when. Having costly power has its own severe penalties. For example, because investors count cost of power as one of the major factors before pouring investments, we would expectedly be at the losing end in the competition to attract foreign investors. Even local investors are shunning away from power- dependent industries, for obvious reasons. Well, to be sure, practically all productive efforts in all sectors are weighed down by the heavy burden of high power cost. In a globalizing economy where open competition is theoretically the rule, we could well go under because high power rate is such a crippling disadvantage.
The other tragedy pertains to individual opportunities lost which are even more incalculable. To make a simple case, how much could a family have saved from its electric bills over the years, if the plant had been operated? Multiply that by the number of households that have been using electricity and the cost of lost opportunities for each of them.
As it is, today we have the highest power rate in the region. Yet, we may still top that in a few years. Widespread rolling power outages are already certain by next year and no remedy is in sight.
Indeed, the BNPP is a heartbreaking story of a myriad, uncountable lost opportunities and billions of pesos that went down the drain. When you look for reasons why the Filipinos are today mired in poverty, it helps to understand the ill effects of mothballing the plant which could have otherwise been our vehicle for achieving progress.
But then we’d rather blame everything on corruption…