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EVA and PCA stand on the ADB’s eTrike initiative

February 2012
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The Electric Vehicle Alliance (EVA) and the Partnership for Clean Air (PCA) wrote to the ADB regarding the proposed “reallocation of USD 110 million away from the original stipulation in the approved Country Investment Plan of the Philippines with respect to the Clean Technology Fund (CTF).” The amount will pay for the purchase of about 100,000 electric tricycles, with the intention of having these replace conventional ones currently operating in many Philippine cities and towns. Following is the letter from the EVA and PCA:

Warm greetings!
We wish to inform you that the Electric Vehicle Alliance (EVA) represents a broad assembly of private sector organizations involved in vehicle manufacturing and assembly, fleet operations, battery solutions, electricity provision and after-sales servicing, academic institutions, government officials and civil society groups. EVA is spearheading the transition of the country towards a low emission transport regime, particularly through the sustained deployment of electric vehicles.

We wish to inform you that, in principle, EVA supports the aims enunciated by the eTrikes proposal that your office is currently evaluating. We urge your office, however, to postpone decisions over the requested reallocation of USD110 million away from the original stipulaton in the approved Country Investment Plan of the Philippines with respect to the Clean Technology Fund.

We believe further deliberation is warranted in order to correct what may be flaws in the proposal as designed and which can help ensure the genuinely transformational utilization of the CTF.

Among many other reasons, the following deserves serious scrutiny:

1) Country ownership: As documents from the Philippine government will demonstrate, country ownership of the initiative is far from certain. We attach, as an example, a document from the Department of Energy expressly stipulating that this is largely an ADB-driven initiative, a fact that is the subject of public debate at present.

In addition, as the the lead agency that determines climate change policy and operational coherence with regard to Philippine mitigatory and adaptation measures, there has been no formal involvement of the Climate Change Commission in the crafting, much less finalization, of the said proposal. The eTrikes initiative remains under intensive discussion at the National Economic and Development Authority (the Philippine planning authority) as to whether or not it will be included in the Investments Coordination Committee of the country.

2) Lack of government consultations with the private sector, civil society and academe. The Department of Energy itself has stated that it has not undertaken formal consultations with stakeholders to the enterprise, particularly the transport sector and the banking sector. (Using subsidized credit from the CTF the eTrikes project may potentially crowd out commercial banks intent on opening lending windows for e-vehicle financing) and, particularly, the renewable energy industry from whose sector the USD110 million is going to be diverted. No member of the renewable energy industry, in fact, has been consulted over the reallocation of the funds.

3) Design flaws. Unless corrected – which is also the purpose behind the need for quality undertaking of consultations – huge gaps in the project design are likely to have an adverse impact on the long-term success of the transition to low carbon transport in the Philippines. For instance:

* No feasibility study has been presented to sectors that stand to gain from, or be adversely impacted by, the eTrikes proposal. We believe such a brief should actually be the basis for consultations that the Philippine government is obliged to undertake.

* The project unbundles the undertaking into four operational clusters that will be bidded out: motor and controller; battery supply; charging station and chassis/body. It is uncertain if there is a fifth cluster on after-sales service, specifically because is no bidding process for the assembly stage of the operations. This last point particularly invites sticky warranty and legal issues – if there is no aggregator of the different clusters of the project, the question is who will assume liabilities? We hope it is not the Philippine government.

Furthermore, haphazard unbundling may also involve questionable transactions down the road given the size of the undertaking. (A single firm that does not undergo bidding may end up assembling 100,000 E-Trikes that, as the project proponent states, will be given away to “beneficiaries”).

We can identify further concerns but suffice it to say, from the examples cited above, a postponement of decisions by the CTF board is warranted.

We would be pleased to share with you further details about issues that will arise if decisions are made with undue haste.

Thank you for your attention.

Signed,
Mr. Rene Pineda Jr.
President, Partnership for Clean Air, Inc. (PCA)
Convenor, Electric Vehicle Alliance (EVA)

EVA Members:

Danilo Villas – AMMEO; David Garcia – Atin ‘To; Michael Alunan – Atin ‘To; Atty. Glynda Bathan – CAI-Asia; Bert Fabian – CAI-Asia; Alvin Mejia – CAI-Asia; Dir. Gregorio Tangonan – COMSTE; John Sognco- COMSTE; Engr. Jean Rosete – EMB-DENR; Asec. Cora Davis – DENR; Manny Sabater – DENR; Dir. Zenaida Mendoza – DOE; Arnel Garcia – DOE; Lourdes Capricho – DOE; Dr. Manuel Biona- DLSU; Rey Esguerra – DOST; Cynthia Lazo – DOT; Engr. Terry Galvante Jr. – DOTC; Art Valdez – former DOTC Undersecretary; Yuri Sarmiento – e-jeepney; Sec. Bebet Gozun – Office of the Phil. President; Yvonne Castro – EVAP; Red Constantino – iCSC; Efren Cruz – FPAD; Engr. June Yasol – JAYAREC; Ma. Theresa Calo – Mandaluyong City Office; Rannie De leon – Mandaluyong City Office; Anthony Agoncillo – Meralco; Mack Dizon – Meralco; Melinda Derpo – Meralco; Frank Collantes – Meralco; Jufaleh Constable – Meralco; Annie Reodica – Meralco; Victor Baylosis – Meralco; Carlo Nombres – Meralco; Tessa Oliva – Miriam P.E.A.C.E.; Raquel Naciongayo – MMASBA; Arnold Sarmiento – Motolite; Rhene Borja – Motolite; Abelardo Mendoza – Motolite; Rommel Juan – MVPMAP; Bong Cruz – MVPMAP; Ferdie Raquelsantos – MD Juan Enterprises; John Marasigan – PhUV; John Lee – PhUV; Rene Pineda – PCA; Vicky Segovia – PCA; Aileen Tepace – PCA; Alberto Suansing – SOPI; Jose Regin Regidor – UP-NCTS; Atty. Gia Ibay – WWF; Denise Galvez – WWF; Vince Perez – WWF; Lory Tan – WWF; Elsie de Veyra – ZWRMP

The statement is a clear expression of the stand taken by stakeholders in the e-trike saga. It is also clear that many if not most stakeholders have not been consulted in the rush towards the deployment of 100,000 electric tricycles. While the ADB and the DOE may have meant well in pushing for electric tricycles to replace the conventional ones, railroading e-trikes will cost the fledgling local industries a lot considering the possibility that the electric vehicles will all be imported from China. It should be noted, however, that there has really been little or no success at this stage since the e-trikes that have been donated have only added to the current fleets comprising of legitimate and colorum tricycles. Perhaps in the haste or excitement associated with the potential positive impacts of e-trikes (e.g., low emission transport) on the environment, the bigger picture concerning issues on public transport in Philippine cities and towns has been disregarded. But then this might be understandable since the approach appears to be still mostly from the energy perspective rather than transport’s. It should be emphasized again that the DOTC, as the lead transport agency with a mandate to draw up policy concerning transport in the country, should be active in the discussions and present a clear road map for what transport should be in terms of hierarchy and taking into consideration the relationship between demand and supply. Then perhaps the direction we are taking in relation to low emission transport such as electric vehicles will be a clearer and, not to mention, a straighter one.


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