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Laiban’s dam cost

(Article published in the Oct 7, 2009 issue of Manila Standard Today)  

It is not clear to me why the Metropolitan Waterworks and Sewerage System is enamored, if not fixated or obsessed, with the Laiban Dam project.  Last Thursday (Oct 1), MWSS announced that because it has not yet received from project proponent San Miguel Corporation (SMC) formal letter…indicating whether it was really pulling out of the P65 billion Laiban Dam project,” the government’s “evaluation process will continue until SMC submits a letter saying it is dropping its bid for Laiban.”  This unwavering commitment despite a clear and public declaration as early as a month ago by the president of SMC that “I said (to MWSS) that we should not negotiate it for now. We have lost interest.”

In order words, simply for want of a piece of paper, MWSS sees nothing wrong with further spending precious time and money of taxpayers evaluating SMC’s proposal, even if no less than the president of the proponent had already told the whole world that it was not going forward “for now” and that it has “lost interest.”

The MWSS administrator is reported to have said further that Metro Manila and parts of Bulacan would run dry unless Laiban Dam comes on stream by 2015.  Thus, if SMC remains true to its president’s word, the good administrator is prepared to consider going it alone, even to the extent of borrowing money to the tune of P65 billion which is thirteen times its P5 billion statutory authority to borrow.  And in the process, not only sink our country into further debt but also, which is worse, grab a big portion of the Official Development Assistance pie from more meritorious projects.
 










     

The year 2015 is just about six years away and as a resident of Metro Manila, I am getting anxious about my water supply by then. Presently, my water comes from Angat Dam which was built in 1968. The aging dam is said to have “cracks”, if Vice Governor Wilhemino Sy-Alvarado is correct, or just normal “seepage” if Rodolfo German, Napocor general manager of the Angat hydroelectric power plant is to be believed.  But whether it is really “cracks” or “normal seepage”, there is no denying that Angat Dam sits on top of an earthquake fault.

Relying on such precarious source for all of Metro Manila’s water is certainly not a prudent thing to do.  Having an available supplementary, if not alternative, source of water come 2015 is more comforting.

Time may not be on the side of Laiban Dam Project, though.  True, in 2000, MWSS made an internal study of Laiban that forecasted completion in about 8 years, assuming the best of conditions: simultaneous and overlapping of fund sourcing, pre-construction, land acquisition, and resettlement.  The dam will be operating at only 67% capacity on the first three years and so we really have to wait, even on the basis of MWSS’s optimistic study, 11 years before Laiban provides all the water that we needed 5 years earlier.

A more comprehensive study conducted a few years later had a less rosy outlook.  The study was sponsored by the Japan International Cooperation Agency and was participated in by the MWSS and other government agencies such the National Water Resources Board, the Department of Environment and Natural Resources, the Department of Public Works and Highways, the NEDA, the Department of Interior and Local Government, and the National Irrigation Administration.  Also involved were private entities, such as the water concessionaires themselves, Nippon Koei Co. Ltd, and NJS Consultants.

According to this study’s final report which came out in February 2003, the Laiban Dam project was estimated to require at least 11 years (instead of NWSS’s 8) to be completed: Five and half years for pre-construction arrangements and another five and half for actual construction.  Even with a period that is longer than the 2000 MWSS internal study, says the executive summary of the JICA study, “the schedule is tight with no time float.” Obviously, “time float” is the polite way of referring to the probable reasons for delay, such as government bureaucracy, judicial intervention, creditor hesitation, and other factors only the Holy Spirit can foresee.

The year 2015 is just six years away; hence, based on my lawyer’s math, even if the Laiban Dam project were to be started today, October 7, 2009, the first drop of water from the site, assuming the miraculous completion of the review process of the proposal that has no proponent, will possibly flow out of my faucet (assuming, again, I get part of the 67% capacity) only after the metropolis has gone dry and very thirsty for about a year, even at Pollyana estimate of MWSS.

Of the pre-construction arrangements, a daunting obstacle that everyone concedes could push later the start of construction (and the consequent flow of the first drip of Laiban water on my faucet) is the need to evict and relocate the by 5,000 or so families (who by now have have increased to 10,000) of informal settlers in the area, including the indigenous Dumagats and Remontados whose welfare and integrity we all prayed for last Sunday.  Another is the process of negotiating and paying for the right of way to lay out the 70 kilometer pipeline from the dam to the treatment plant, forty of which goes overland, through a lot of heavily populated sites with the remaining thirty into tunnels to be carved into mountainous and rugged territory.

Funding the project appears to be getting problematic; lenders seem to be getting as nervous as myself.  The Japan Bank for International Cooperation, earlier hinted to be a likely source of funds, for instance appears to be having second thoughts.  JBIC’s Manila chief representative is reported to have said, “We have to settle things with NGOs (non-governmental organizations) and the affected residents, LGUs (local government units), things like that—that would be difficult for us, because in our office in the Philippines, we don’t have that many staff.”

And even if JBIC did have enough staff, the great unknown to the expected lender is how much and how long it would take to displace the informal families. JBIC’s Manila Representative politely but stressfully says, “On Laiban project, we have concern about environmental impact.  As far as we know, they would have to re-settle more than 3,000 or 4,000 families, so that is our big concern.”  That, JBIC rightly understands, “will take very long process, it may take even more than 10 years, so we’ll have to assess the risk.”  That is clearly a Japanese polite “No”.

Which means that we luckless consumers in the serviced areas would have to ourselves finance initially in the form of taxes to fund the project from beginning to end, and, eventually in increased rates for the government to recover the dam cost. It was comforting, of course, to hear, from the uninterested proponent, that any increase in water rates will be commensurate to the capital needed to provide uninterrupted water supply to the people in Metro Manila and nearby provinces.

But wouldn’t it have been lovely if we were consulted on whether we wanted our water to come from the  Laiban Dam in the first place?

     

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