COA: China firm got Kaliwa project though lacking requirements | Inquirer Business

COA: China firm got Kaliwa project though lacking requirements

/ 08:33 PM August 19, 2019

MANILA, Philippines – The Commission on Audit (COA) has flagged the awarding of the New Centennial Water Source – Kaliwa Dam Project (NCWS-KDP) to a Chinese firm that supposedly skipped several requirements.

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


According to a COA table, the date of completion for past projects by the firms, including China Energy Engineering Co. (CEEC) Ltd. — the winning contractor — was not specified, which was contrary to MWSS rules.

“Review of the results of the TWG’s vetting report revealed that the China Energy Engineering Corporation Limited and Consortium of Guandong Foreign Construction Company Limited Guandong Yuantian Engineering Company did not indicate the completion date of the construction projects undertaken […] hence the remark ‘Not Stated’ in the vetting report,” COA said.


“The TWG should have been more circumspect to verify whether the reported projects were actually completed to establish the validity and existence thereof and to attain the purpose of vetting which is to evaluate whether the nominated Chinese contractors meet the minimum technical qualifications,” it added.

COA also noted that CEEC already conducted preliminary project activities despite the loan agreement not yet taking effect.

“As per interview of the project manager, it was admitted that the CEEC Limited already deployed some of its technical equipment and construction assets in the project site and conducted preliminary construction activities including topographic and geologic surveys,” the audit body explained.

Aside from this, it was also observed that the bidding results did not reflect a “criteria of competitiveness.”

In addition to that, COA added that the loan agreement between the MWSS and the China Eximbank remained ineffective as required documents have yet to be submitted.

“The Notice of Award (NOA) was already issued to China Energy Engineering Corporation (CEEC) Limited last 11 October 2018 but the Notice to Proceed (NTP) was yet to be issued pending the submission of […] documents,” COA noted.

“Thus, Management should expedite the processing of the requirements, otherwise the terms of the loan will be revised or the loan facility will be canceled,” it warned.


The Kaliwa Dam, which is seen to alleviate Metro Manila’s water woes, has been garnered various reactions. According to Finance Secretary Carlos Dominguez, the project should be the answer to the water supply shortage experienced this dry season.

READ: Water supply shortage? China-funded Kaliwa Dam would ‘absolutely’ help, says Dominguez

Most of the reactions were against it, as several concerned personalities stress that the dam project may destroy the ecosystem and habitat of people in several Quezon province towns.

READ: 12,000 sign petition to stop Kaliwa Dam

READ: Kaliwa Dam deal ‘suspiciously disadvantageous’ to PH

Others, on the other hand, criticize the project for being disadvantageous to the country. However, MWSS Administrator Reynaldo Velasco insisted that the proposal of the Chinese firm of $248 million is cheaper than the Japanese consortium pitch of $410 million.

READ: MWSS: China-funded Kaliwa Dam cheaper than Japan-proposed project

READ: Dominguez: China loan for Kaliwa Dam 30% better than Arroyo debt for Angat


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TAGS: CEEC Ltd., China Energy Engineering Co. Ltd., COA, Commission on Audit, Kaliwa dam
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