Probe Kaliwa Dam bidding

The project that Finance Secretary Carlos Dominguez III has described as the “absolute” answer to the water woes that have plagued the metro for the better part of the year is, according to a recent report by the Commission on Audit (COA), also a project riddled with irregularities.

Why, the COA asked, was the New Centennial Water Source-Kaliwa Dam Project—an P18.7-billion behemoth expected to be completed in 2023, with a capacity of 600 million liters of water per day—awarded to a Chinese firm that had failed to fulfill several requirements? With the winning contractor bagging the project despite skipping such requirements, was this, in fact, a negotiated contract under the guise of public bidding?

In an audit observation memorandum dated June 10 but released only on July 18, the COA said the Metropolitan Waterworks and Sewerage System (MWSS) Technical Working Group has a lot of explaining to do after it confirmed the shortlist of three Chinese contractors—even if all lacked prequalification requirements.

Contrary to MWSS rules, the date of completion for past projects by the three firms, including the winning contractor—China Energy Engineering Co. (CEEC) Ltd., was not specified, a requirement that would have established the validity, existence and technical competence of the bidding companies. Wasn’t this the essence of vetting—determining if the three bidders were actually capable of completing multibillion-peso projects?

The COA also noted that two of the three final bidders presented by the MWSS lacked technical requirements, among them the mayor’s and business permit and an accreditation license. Meanwhile, the third bidder, which passed the technical requirements, overshot the approved budget by P842.743 million, but was still included despite the rule that such overpriced bids would be automatically rejected.

So—were the two bidders included merely to comply with the requirement of at least three bidders for the project? Why were the documentary requirements for the project submitted 135 days after the execution of the contract, and not within 5 days as stated in a 2009 COA circular? And why was the CEEC already conducting preliminary project activities—including topographic and geologic surveys—despite the loan agreement still to take effect?

One will have to look further for the answer to that last question: The dam project, according to MWSS administrator Reynaldo Velasco, had already been greenlighted by the National Economic and Development Authority (Neda), chaired by no less than President Duterte. “With the approval of the highest level at the Neda, done deal na yan (it’s a done deal),” Velasco said, adding that he doesn’t think Mr. Duterte would reverse his decision.

That “done deal” had aroused concerns from the outset, relating to the loans offered by China to bankroll the project. Apart from being a possible debt trap for the Philippines (as has happened with other countries crushed by Chinese loans), the agreement made it too easy for China to declare the loan in default and declare “all the principal of and accrued interest … immediately due and payable,” warned Sonny Africa, executive director of independent think tank Ibon Foundation.

Per the agreement released by the finance department, the loan is governed by Chinese laws, and any disputes will be settled in the Hong Kong International Arbitration Centre—a distinct home advantage for the Chinese lenders and contractor. And “China is not just any lender. It is aggressive in asserting its global agenda even at the expense of human rights, environmental protection and feeding corruption in debtor governments,” Africa said.

The dam is also feared to adversely affect the lives, lands and livelihood of the more than 20,000 Dumagat people living along the Kaliwa riverbanks in Quezon and Rizal provinces who would be displaced by the project. Wilma Quierrez, secretary general of Dumagat Sierra Madre, said the 62-meter-high dam would inundate their ancestral lands in at least 18 villages. They were never consulted about the project, she said.

With so many questions hanging over the Kaliwa Dam project, and vast amounts of money in play, where is the urgent Senate hearing that should look more closely into its paperwork and fine print? Neophyte senators could certainly make their mark and prove their mettle by scrutinizing what appears to be another instance of government expediently cutting corners for a behest project—and thereby help forge a balance between essential accountability and transparency, and a pressing public need.