(First of two parts)
President Ferdinand Marcos Jr. appears intent on getting the mothballed Bataan Nuclear Power Plant (BNPP) going before he steps down in June 2028, in what critics say could be yet another project to airbrush his father’s legacy.
The nuclear power plant in the province of Bataan west of Manila was built in 1984 amid issues of overprice and corruption during the regime of President Ferdinand Marcos Sr., and has been idle for nearly 40 years. But a Korean company could get it operational in five years, if the price is right and political opposition doesn’t get in the way.
“The biggest potential for PNPP 1 (Philippine Nuclear Power Plant) is to open the door for a nuclear Philippines,” Pangasinan Rep. Mark Cojuangco, a longtime advocate of nuclear energy, told CoverStory.ph in an interview during the holidays.
“It’s a social license acceptance,” he added, letting the cat out of the bag on why the facility had to be restarted during the President’s six-year term.
Cojuangco believes that once the $2.3-billion, 620-megawatt PNPP 1—the official name preferred by the lawmaker to BNPP, a term that, he claimed, was coined by anti-Marcos groups—kicks into gear, other nuclear power plants will follow.
“The site is good for three more plants, each with a capacity of 1,000 MW,’’ he said.
Hefty price tag
Korea Hydro and Nuclear Power Co. (KHNP) has offered to rehabilitate the facility under a build, operate and transfer (BOT) scheme. It’s the same company that did pre-feasibility studies on commissioning the plant in 2008 and 2017; it is operating an identical plant in South Korea.
But there’s a catch: KHNP executives have “verbally” sought a hefty rehabilitation price tag—much higher than their offer of $1.17 billion in 2017 and $1 billion in 2009—supposedly to cover the additional costs of upgrades to avert a “Fukushima incident,” according to Cojuangco, who met with them in South Korea early in December.
In 2011, a powerful earthquake and an ensuing tsunami triggered multiple meltdowns at the Fukushima Daiichi plant in northern Japan.
“I won’t mention the amount,” Cojuangco said. “But I told them that politically, that is unacceptable because they already gave word on $1 billion and then $1.17 billion. And the $1.17 billion took into account items that would address the Fukushima issue.”
“They were insisting that there were additional items, but again, I told them these were minor in terms of the totality,” he said. “But if there was going to be an increase, it should be comparable to the jump from 2009 to 2017; that’s reasonable. We won’t agree to something unreasonable.”
The price tag, Cojuangco recalled telling the executives, should be “publicly defensible” lest it come under criticism.
He said he had requested the executives to put everything in writing—from justifying the jump in the rehab cost to spelling out the terms of the BOT scheme and pegging the power rate per kilowatt-hour—which he would then submit to the President.
“If it’s too expensive, what for?” Cojuangco said.
He said he had engaged KHNP and its officials not as a government representative, but as part of his role as a lawmaker who chairs the House of Representatives’ committee on nuclear energy. He said he saw no conflict of interest in doing so.
But according to Energy Undersecretary Sharon Garin, the national government owns the BNPP and will eventually have to step in to negotiate the terms of the offer from the Korean company, or any other company, for that matter.
“When you talk about [the BNPP], it’s a national government property. For any transaction involving it, that will involve the national government. Thankfully, Congressman Mark is proactive in this sense. But you have to be cautious that this is a government property,” she told CoverStory.ph.
Cojuangco said it was the closest to a “best deal” yet, but the government should be able to complete the paperwork by December 2023, in keeping with the Korean firm’s timeline. Otherwise, he said, the plant’s operation would happen beyond the Marcos Jr. administration.
Before the end of 2023, the Philippine government must have already signed an intergovernment agreement on the use of nuclear energy and a memorandum of understanding with South Korea to clear the way for the rehabilitation.
“It’s the best not because of the financial [terms] but because of their expertise. They are running the identical plant to our plant,” Cojuangco said, referring to Kori 2 nuclear power plant in Busan, South Korea.
In his view, the ideal period for the Korean company to operate the BNPP is 80 years.
“If we want the lowest price for our people, it should be the longest term possible, and at the lowest interest rate,” Cojuangco said. “That’s why they have to tell us the per kilowatt hour price. It has to be low for nuclear to be attractive. If you really want nuclear to be attractive, the No. 1 criterion is the price. Make it low when you offer. It’s an offer that the Filipinos can’t refuse.”
The Philippines is also looking into possible deals with France and China, the Philippine Nuclear Research Institute (PNRI) earlier said.
‘Don’t push for it’
A confluence of events in 2022—Russia’s invasion of Ukraine that triggered global fuel shortages, rising prices and a push to tap nuclear energy, an executive order issued by then President Rodrigo Duterte to include atomic energy in the Philippines’ energy mix, and the election of a president intent on pursuing his father’s nuclear ambitions—could work in the proponents’ favor.
But an expertly thrown monkey wrench could upset all plans.
Cojuangco said that on the eve of his Dec. 3 departure for South Korea, he was invited by former President and now Senior Deputy Speaker Gloria Macapagal Arroyo to a dinner at her home in La Vista, Quezon City.
“Point-blank she told me, ‘We’re going to oppose you on BNPP. Don’t push for it’,” he said. “I told her, Madam President, even if you succeed at having me removed from the committee, I won’t stop this, even if I’m no longer a congressman. This is fit for the Philippines.”
It was the second time Arroyo, a member of Cojuangco’s committee, had sounded him off on her sentiments.
Cojuangco went on with his narrative: He gestured towards Energy Secretary Raphael Lotilla, also a guest at the dinner, and told Arroyo: “Our Secretary here, how’s he going to push for it if he’s a nuclear skeptic?”
On Arroyo’s prodding, Lotilla denied the lawmaker’s claim. Arroyo then turned to Cojuangco and said: “You see, he’s not a nuclear skeptic.” Chuckles from the other guests were heard.
Cojuangco said he proceeded to argue that had the BNPP been commissioned in 1986, the country would have averted the power crisis it was experiencing now. “Wasn’t the old man Marcos right, after all?’’ he recalled telling his host.
Arroyo quickly retorted: “So is this all about vindicating the old man Marcos?” Cojuangco said he responded by saying that President Marcos Jr. wanted to go nuclear to help the poor cope with high power rates.
Bataan Rep. Albert Garcia has also opposed the revival of the BNPP for its attendant danger and hazards.
But Cojuangco said: “If there are unreasonable people, he (the President) has to put his foot down.”
The main challenge to the revival of the BNPP “is an unseen force,” said PNRI Director Carlo Arcilla. “What will the current owners of the big power suppliers think of the nuclear impact to them?”
But even if the plant is put in operation, the next challenge is to tweak the Electric Power Industry Reform Act of 2001 to allow the national government to produce power through the facility. Under the law, the government is barred from generating power.
“That’s one legal obstacle that needs to be [hurdled],” Arcilla said.
Another option is to sell the BNPP to a local company which can then partner with the foreign investor to operate and eventually sell electricity to consumers, he added.
Ferdinand Marcos Sr. contracted Westinghouse Electric to build the BNPP in response to the 1973 oil crisis. But issues of overprice and corruption, along with safety concerns, hounded the project. In 1986, following the dictator’s ouster and the Chernobyl disaster, President Corazon C. Aquino ordered the plant mothballed.
In 2012, the Sandiganbayan antigraft court ordered Marcos crony Herminio Disini to return $50 million in commissions he received from Westinghouse for brokering the BNPP deal. Nine years later, the Supreme Court ordered Disini to pay the Philippine government P1.1 billion in damages for liability for exerting undue influence in the award of the deal to the US firm. The plant has been maintained at a cost of $800,000 a year. To be concluded