MORE than 16 years after it was created, the Northeastern Luzon Pacific Coastal Service Inc. (NLPCSI), a government-owned or controlled corporation (GOCC) that was supposed to start coastal ferry service in the Pacific Coast provinces has not put a foot in the water.
In fact, it has never gone into operation at all even if it is listed with the Securities and Exchange Commission, has a board of directors, and P40 million in paid-up capital.
Now, the Commission on Audit is pressing the management to make up its mind once and for all whether it will pursue its intended purpose or dissolve itself altogether.
“We would like to emphasize that NLPCSI remained non-operational since its creation.
Consequently, it has neither achieved the objectives and purpose for which it was intended nor generated the level of social, physical and economic returns vis-à-vis the resources invested,” the audit team said.
The plan was to make the company a vital cog in former President Gloria Arroyo’s “Strong Republic Nautical Highway” by operating sea vessels to transport passengers, raw materials, finished products, commodities, and goods and offering facilities for warehousing and storage in its dockyards.
Its area of operation was to cover Quezon Province in the south all the way to Cagayan Province in the North with port calls in Aurora and Isabela.
The same four provinces initially agreed to each subscribe to 100,000 shares of stocks at P100 per share. Quezon later backed out and the Cagayan Economic Zone Authority (CEZA) took its place as a stockholder.
The governors of the provinces of Cagayan, Aurora, and Isabela, together with the administration and chief executive officer of CEZA, compose NLPCSI’s board of directors.
In 2009, it borrowed P64.7 million from the Development Bank of the Philippines (DBP) for a planned acquisition of two vessels.
The procurement did not push through and the company spent the next 10 years paying the loan with interest.
“In 2019, except for the payment of the loan granted by the DBP, including the interest incurred, and the interest on bank deposits, the NLPCSI has no other transaction. It has neither permanent nor contractual employees to manage the day to day activities of a business involved in the operation of a coastal service facility,” the COA pointed out.
It added that the cash assets remain invested in time deposits but could have gone to more urgent government programs to benefit the residents of the three provinces.
Since the governors are also local officials, government auditors said it appears that running the NLPCSI has taken a backseat in their priorities so they even find it hard to find the time to convene.
In the last two years, the company spent P71,104, including P30,000 each year, as per diem during meetings and P5,552 each year as expenses.
In its comment to the audit observation, the NLPCSI management said the CEZA has offered to acquire all the shares of the three provinces to make the company a wholly-owned subsidiary.