(Second of three parts)
MANILA, Philippines - Conceived as early as 1979 during the Marcos era, the Laiban Dam in Tanay, Rizal, is a project 30 years in the making, meant to provide Metro Manila residents with an alternative source of drinking water to the larger Angat Dam in Bulacan.
At that time, a detailed study and preliminary work was conducted until President Corazon Aquino deferred the project in 1989 due to ballooning costs. But studies continued through the Ramos and Estrada presidencies, with the Arroyo administration identifying Laiban as an infrastructure project that would be funded by a loan from China?a proposal that fell through after Chinese state loans were put on hold in the wake of the ZTE scandal.
Fast forward to September 2008, and into the picture steps diversifying conglomerate San Miguel Corp. It?s unit, San Miguel Bulk Water Co. Inc., submitted an unsolicited proposal to put up and operate the P50-billion dam that was dropped by US-based CalEnergy due to worries over their ability to meet land acquisition and resettlement requirements.
In an interview with the Inquirer, SMC president Ramon Ang pointed to the looming water shortage in the metropolis as the greatest argument for pursuing the Laiban project.
At present, the 41-year-old Angat Dam is the only source of potable water for 95 percent of Metro Manila, with the balance using water from deep wells. A 2002 study by Norwegian consultants also found Angat to be sitting on the extended Marikina fault line, concluding that the level of risk of having a single source of water exposed to earthquake risk was ?unacceptable.?
Other studies conducted as recent as 2007 by foreign consultants project that Manila?s water requirement will rise to 5,600 million liters per day (MLD), overwhelming Angat?s 4,000 MLD maximum capacity. Thus, the projected 1,600 MLD deficit fits almost perfectly into Laiban?s maximum supply capacity of 1,900 MLD.
Despite this, Ang admits that the project, by itself, will not yield a significant return on investment?the same conclusion supposedly reached by Maynilad Water Services Inc. when it decided to pass up an offer to undertake the Laiban project two years ago, according to sources.
?There?s not much money in water,? he said, noting that the proposed P20 per cubic meter selling price of Laiban?s water may even come down once haggling with regulators begin.
?But my idea is to build a power plant beside the dam [to generate electricity] which we can sell,? Ang said. ?That?s where we [will] earn money to make the project viable.?
The SMC chief?s plan calls for the construction of a 1,000-megawatt ?peaking plant? that will pump water up the dam at night when demand for power is low, and use the water falling over the dam during daytime to power turbines that will generate hydroelectric power.
?We will pump water up at night at the cost of P1 per kilowatt hour,? said Ang, who is also a mechanical engineer by training. ?Then we will let water flow down and generate electricity by day when it sells for P5 per kilowatt hour. So tell me, will we make money or not??
The criticism began soon after negotiations were concluded, starting with Economic Planning Secretary Ralph Recto protesting the deal?s alleged government guarantee, and the process? lack of transparency.
However, MWSS Administrator Diosdado Jose Allado said his agency had obtained the legal opinion of the Office of the Government Corporate Counsel, which ruled that the agreement with San Miguel did not constitute a government guarantee.
He also said that MWSS followed?to the letter?standard joint venture guidelines issued by no less than the National Economic and Development Authority (Neda), including Neda?s rule on providing for a seven-day period within which prospective challengers could acquire bid documents from the MWSS.
?We were required by law to publish this notice in one newspaper of general circulation,? Allado said. ?We went beyond this and published in three newspapers: The Inquirer, Star and Bulletin.?
And yet no one expressed the slightest hint of interest in the Laiban Dam project. ?No one even came to our offices to take a peep at, much less buy, the bid documents,? he added.
The window for potential challengers closed on July 8, with not a single party coming forward to challenge San Miguel?s offer.
Almost immediately after that, the public criticism started and rose to fever pitch. (To be concluded)