Does China control Philippines National grid?

Philippine senators have called for an investigation into the security implications of China’s part ownership of the national energy grid after officials said engineers in Beijing could plunge the entire country into darkness with the flick of a switch.

National Transmission Corporation (TransCo) president Melvin Matibag confirmed there was a “possibility” of such a scenario during deliberations in the Senate on Tuesday over the government budget for 2020.

The State Grid Corporation of China holds a 40 per cent stake in the National Grid Corporation of the Philippines (NGCP), a private consortium which bagged the franchise in 2009 to run the power lines.

TransCo previously ran the system and now has oversight over NGCP, but Matibag told senators that in reality, its “access was limited”.

The State Grid Corporation of China holds a 40 per cent stake in the National Grid Corporation of the Philippines. Photo: Xinhua

Opposition Liberal Party senator Risa Hontiveros first raised questions over the extent of Beijing’s control given the continuing territorial conflict between the two countries in the South China Sea.

She said China “is a part of our daily lives every minute, every hour, every moment as long as the system operation is … controlled and managed by Chinese engineers … Indeed an enormous power”.

“What if someone in Beijing switches it off?” she asked energy officials during the 10 hours of proceedings in the Senate to approve the budget.

Sherwin Gatchalian, who chairs the Senate committee on energy and is tasked with defending the government budget for the energy department, replied: “I was advised by the president of TransCo that they have studied this type of possibility. I was advised that manual operation of transmission lines is possible. A takeover [by Beijing] can happen, but TransCo, with their technical capability, can then manually take over.”

Gatchalian, a Philippine-born ethnic Chinese, added: “We will invite national security experts and the National Security Council to make sure they have contingency plans.”

He also reminded lawmakers that a clause in the franchise agreement gave the Philippine president the power to reclaim all energy assets in the event of “public peril”, adding that national security would be “100 per cent protected”. However, Senator Miguel Zubiri, an ally of Philippine President Rodrigo Duterte, said the clause would only apply “as long as we are not being invaded”.

“If we are being invaded and they black us out, then that is a problem,” he said.

Opposition Liberal Party senator Risa Hontiveros.

Power to the grid could only be restored by the Philippine side through manual override within “24 to 48 hours depending on the gravity” of the situation, energy officials said.

Recent media reports have claimed only foreign engineers are able to troubleshoot, operate and control the NGCP’s power transmission network due to its remote monitoring and control system, which is located in China under the Nari Group, based in Nanjing.

Others have reported that instruction manuals are in Chinese and that Filipino engineers are unable to operate the system.

Hontiveros acknowledged these reports and asked TransCo officials to verify whether the remote set-up enabled Beijing to switch off the grid.Nari Group’s system also supplies remote control systems to power grids in Kenya, Indonesia and Thailand, she said, countries which “may be sources of assurance for us or important cautionary lessons”.

Gatchalian conferred with the energy officials during the Senate session and then told Hontiveros: “I was advised by the TransCo president that it is operated by what they call Scada and can be operated remotely.”

Scada stands for supervisory control and data acquisition, a computer system used in various industries for real-time monitoring and control.

Workers install a power transformer in China’s Anhui province. Photo: Xinhua

Gatchalian added that according to the officials, the Chinese manuals had been translated to English. “I was advised that Filipino engineers are operating the grid,” he said.But Senator Richard Gordon insisted the matter be further verified. He said that if a sitting senator were to visit NGCP and Philippine executives there barred the lawmaker from entering out of fear of being fired, then the Philippines was not really in control.

The national security concerns were raised as senators awaited word from the Department of National Defence on whether it would allow Chinese-backed Dito Telecommunity Corporation, formerly known as Mislatel – the Philippines’ third and latest telecoms player – to install communication towers in military camps.

Last week, opposition Liberal Party president Francis Pangilinan reiterated in the Senate concerns raised in recent weeks over the possible national security risks incurred in the proposal, which he said would allow China to eavesdrop on the Philippine army.

He revealed that a risk assessment carried out by the Armed Forces of the Philippines had concluded that the current fixed communication system used to link all military camps and bases nationwide was “susceptible to electronic eavesdropping and interception”.

Pangilinan added that eavesdropping equipment was “readily and cheaply available”, which meant the Philippines must take steps to restrict access and secure the network.

However, Senator Panfilo Lacson, a former military officer who chairs the Senate defence committee, said defence and military officials had assured him the government would be able to unilaterally terminate any agreement with Dito at any time.

The defence department nevertheless promised to submit to the Senate before the end of November any memorandum of agreement signed with the firm.