CUC adheres to cost-cutting

Realizing the precarious financial condition, the Commonwealth Utilities Corp. is stepping up its austerity measures in line with the administration efforts to cut costs amid declining government revenues, officials said.

CUC Chairman Juan S. Dela Cruz stressed the need to comply with belt-tightening program of Gov. Pedro P. Tenorio despite the sound financial record of the government-owned corporation compared with other agencies.

“While CUC’s financial condition has significantly improved over the past two years, we cannot ignore the fiscal problems now facing the Commonwealth,” he told a recent board meeting.

“Our continued diligence to save money and operate efficiently is more important now than it has ever been,” Dela Cruz said, adding that CUC must be committed to reducing spending and cutting unnecessary expenses.

Revenues generated by the utility firm have remained flat in recent months due to its inability to provide sufficient power to residential and commercial buildings, especially hotels and garment factories.

Timothy P. Villagomez, CUC executive director, said its current generation capacity at 65 megawatts cannot meet demand for power, losing potential source of income for the company.

He maintained that CUC has to be prudent in its expenditures and limit use of its funds to essential activities, adding that planned Christmas activities have been scaled back to save money.

“We are keeping our spending at a conservative level and scrutinizing all expenditures,” Villagomez said at the meeting last Tuesday.

CUC has led other government agencies in complying with the administration’s austerity measures. In February, officials began several cost-cutting strategy that included travel and overtime restrictions for its employees as well as freeze on hiring.

According to Dela Cruz, they will still continue the efforts to boost its savings while at the same time, find ways to increase its revenues from utility services.

He said they will have to cut down purchase of unnecessary supplies and spare parts, “anything that is not really needed because of the crisis right now… unless we need the parts on emergency basis.”

The island is suffering from the impact of the year-long economic turmoil in Asia — its main tourism market and source of investments — that has forced closure of more than 1,000 local companies and double-digit drop in tourist arrivals to the NMI.