‘Done deal’?

/ 05:28 AM March 21, 2019

Call it a silver lining: Out of the oppressive water crisis that hit Metro Manila in the past weeks, an inadvertent light has been shone on the hitherto obscure but now controversial Kaliwa Dam project.

Malacañang had forthwith proposed the project as the solution to the metro’s water crisis. Finance Secretary Carlos Dominguez III said a Kaliwa Dam in the Kaliwa-Kanan-Agos River Basin in Quezon would “absolutely” solve the water woes. If only past administrations had pursued the project, he rued, “the water crisis will be much less serious or much less of a threat.”


Then the punch line, if you will: In fact, Dominguez pointed out, the Duterte administration is well on its way to realizing the P18.7-billion project—through a loan from China.

The loan agreement for the New Centennial Water Source Project (NCWSP), as the new project is called, was quietly signed during the visit of Chinese President Xi Jinping in Manila in November 2018.


While no one was looking, it seemed, the groundwork had been paved for the Chinese project in record time. The National Economic Development Authority (Neda), chaired by the President, approved the project, a “bidding” happened (which actually was just picking from three Chinese contractors submitted by China itself), and the winner was the China Energy Engineering Corp.

Many immediately sat up at the news, noting that something smelled fishy in the fact that the project, and its push by Malacañang, came to light just as taps around the metropolis suddenly went dry.

Could the water shortage have been staged in some way to drum up acceptance for the Chinese deal?

It didn’t help that Malacañang announced that the National Water Resources Board would now be placed under the Office of the President (a neat way to hand out water projects to China?).

All these would have remained a wild conspiracy theory — until it emerged that a Japanese company had proposed a similar project 10 years ago, on terms and conditions that appear far more generous than those in the Chinese-funded project.

In a press conference it held this week to appeal to President Duterte to reconsider the awarding of the project to China, the Global Utility Development Corp. (GUDC) of Japan reiterated that its Kaliwa Water Intake Weir proposal was a safer, more sustainable and faster project compared to its Chinese counterpart.

GUDC chief executive officer Toshikazu Nomura said the Japanese project will be a 25-year build-operate-transfer  scheme, at no cost to the Philippines, with the Metropolitan Waterworks and Sewerage System (MWSS) paying through the agreed water rates. The Chinese project, meanwhile, entails a loan with an interest rate of 2 percent, said to be eight times higher than most Japanese loans.


The Chinese project will also cost double at $800 million, compared to the Japanese project cost of $400 million for almost the same capacity (600 million liters per day for China and 550 MLD for Japan). It would take the Japanese only 36 months to finish, well during Mr. Duterte’s term. The Chinese? Fifty-four months.

Nomura also touted the GUDC project as highly sustainable and will not inundate communities, since only a weir will be built—a low dam of 7 meters high and 16 kilometers long across the river. China, on the other hand, is set to build a 62-meter-high dam and a 27.7 km conveyance water tunnel to Tanay, Rizal, that will flood Barangay Daraitan and other areas.

“We cannot understand why MWSS wants such high dam, we only need 600 MLD. It does not make common sense,” Nomura pointed out. And he added a damning detail: The GUDC had secured a memorandum of understanding from the MWSS as early as 2009, and was asked to resubmit its offer in 2017. However, Nomura said, “somebody in your government gave pressure” on the MWSS not to entertain GUDC anymore.

The uncharacteristic bluntness coming from a Japanese executive only underlines how seemingly irregular the Duterte administration’s decision-making process has been in this case. Why was the Chinese contract favored over the Japanese one, when a perusal of their terms suggests the latter is far more beneficial for the country?

Given the compelling comparison shown by the Japanese, the government, at the very least, should show good faith by reexamining its deal with China. But MWSS administrator Reynaldo Velasco, for one—for all the missteps his agency has inflicted on the public these past days—is being obdurate about the project. It’s already “a done deal,” he said, and nothing can be done about the GUDC proposal.

Nothing more can be done—despite the glaring onerousness on view? That would amount to sheer dereliction of duty to protect the Philippines’ interests in this case, and the kind of suspicious dismissal of basic good sense that  won’t hold water with the public.

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TAGS: Global Utility Development Corp., GUDC, Inquirer editorial, Kaliwa Dam Project, Metro Manila water shortage, Rodrigo Duterte, xi jinping
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