Metro Manila’s 12 million residents will benefit from cheaper government-to-government loans to construct a new water source compared to the public-private partnership (PPP) scheme, which would entail additional charges passed on to consumers to allow private investors to recover their investments, a finance official said on Tuesday.
In particular, Finance Assistant Secretary Antonio Lambino II said that even if going through the PPP route to build the New Centennial Water Source-Kaliwa Dam Project would be at “no cost to the government,” it would not mean it would come at “no cost to consumers.”
“The higher project and financing costs of a solicited PPP would have been borne by users, eventually,” he said.
Lambino recalled that in January 2014, the then Investment Coordination Committee of the National Economic and Development Authority restructured the project components of the Kaliwa Dam and changed the mode of financing from official development assistance (ODA) to PPP with an estimated project cost of P18.7 billion.
This amount was subsequently slashed to P12.25 billion when the Neda approved the recommendation of the Metropolitan Waterworks and Sewerage System to revise the project’s funding component. This approval was subsequently confirmed by the Neda Board, which is chaired by President Duterte.
An ICC document from 2014 stated that under a PPP mode for the Kaliwa Dam project, “amortization payments will be financed through the imposition of a Water Security Charge as a separate line item in the water bill of the consumers,” he said.
Lambino said that when the Duterte administration took over and decided to undertake the project through ODA, the project cost went down from P18.7 billion under a PPP scheme to P12.2 billion. Even if fees and interest payments are taken into account in completing the project through ODA, the cost would still be significantly lower at P14.5 billion compared to the estimated price tag of P18.7 billion under a PPP scheme, he added.