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A
$1
billion controversial dam project
allegedly marred with secrecy and which has been contradicted since
the 1960s mainly by indigenous peoples to be affected - the Dumagat
and Remado tribes - is now being revived through a joint venture
between business tycoon Eduardo "Danding" Cojuangco's San
Miguel Corporation (SMC) and the Arroyo government.The Laiban Dam Project aims to supplement the long term water supply requirements of Metro Manila by constructing a dam utilizing the Kaliwa River Basin in Tanay, Rizal. It is situated east of Metro Manila and drains a mountainous watershed of about 28,000 hectares on the slope of Sierra Madre Mountains, according to the project description posted in the MWSS website. The Dam will provide an average yield of 21 cms (cubic meter/second) or 1,830 MLD (million liters per day) of water supply and approximately 25 MW for hydropower generation.
MWSS administrator Jose Allado, in a news report by ABS-CBN News.com said, "the Laiban Dam project is a pro-active government initiative that seeks to address the water supply demand of Metro Manila in the year 2015, and to prepare for inevitable deterioration of the only source of water for Metro manila--the Angat Dam Reservoir."
Environmental impacts
As early as March 2008, Bayan Muna party-list Rep. Teodoro Casiño filed House Resolution 510 directing the House Committee on National Cultural Communities to conduct an inquiry on the Laiban Dam Project. Casino warned the revival of the project threatens to displace thousands of Indigenous Peoples, destroy their ancestral lands and cultural heritage, and would severely affect their survival as a people.
Casiño said "the Laiban Dam project that aims to divert 2,400 million liters of water daily would adversely affect the irrigation systems of lowland peasants and indigenous peoples who rely on agricultural production as their main source of livelihood."
"The construction of the Laiban Dam will further destroy over 20,000 hectares of forest cover in the Sierra Madre mountain range, causing permanent damage to the ecosystem, including the immediate possibility of landslides and similar disasters," he added.
According to a statement made by the IBON Foundation Inc. , an organizer of the Water for the People Network, around 27,800 hectares of the ancestral and agricultural lands will also be affected upon the execution of the said dam.
"Take or pay" provision
The government's socio-economic planning arm, the National Economic and Development Authority (NEDA) which is tasked to evaluate the "unsolicited proposal," has been questioning the reported deal between SMBWCI and the MWSS.
Saying that the NEDA was kept in the dark about the proposal, socioeconomic planning secretary Ralph Recto, NEDA director general, expressed reservation on the "take or pay" provision in the contract.
A take-or-pay arrangement happens when one party agrees to purchase a specific amount of another party's goods or services or to pay the equivalent cost even if the goods or services are not needed. This means that if the Laiban Dam's capacity is around 1,900 million liters per day (MLD) and the possible requirement of Metro Manila is lower, the entire 1,900 MLD will still have to be paid for. If unchecked, the provision could lead to the jacking up of water rates to be shouldered by consumers.
The agency said that the "take or pay" provision would be "tantamount to a government guarantee" reported GMA News.tv quoting Recto's June 26, 2009 letter to Allado.
Moreover, the joint venture agreement requires the endorsement of concessionaires Manila Water Co. Inc. and Maynilad Water Services Inc. - which serves Metro Manila's east and west zones respectively - since both are expected to be the recipients of the project's water offtake.
The draft agreement also allows San Miguel to sell or transfer its interest to another party after a given period with the written consent of the MWSS, Recto said.
The transfer of interests should be to a qualified party that has, at the minimum, similar experience on the operation of water supply/dam projects, he added.
Nothing secret
But Allado explained that pertinent information about the proposal from the San Miguel was still bound by a confidentiality agreement as this was still being evaluated.
"There is absolutely nothing secret or sinister, illegal or inappropriate about this project," Allado said.
However, an increase in water rates was confirmed by the MWSS, but only by 50 percent from 2015, when the Laiban opens, up to 2040. The increase will translate to around P42 per cubic meter, a Manila Times report said.
The MWSS said the process observed by the MWSS and the joint venture selection committee were made in accordance with the Joint Venture guidelines drafted by the NEDA and approved by the Cabinet and NEDA Board in 2007.
Government Corporate Counsel Alberto Agra, vice chairman of the panel, said no rule or law prevents a "take or pay" arrangement in government contracts.
"What [policy prohibits] is a direct government guarantee. A take-or-pay arrangement is legal, no law prevents it," Agra told reporters in a press briefing.
Corporate rivalry?
Rumors in the business community are ripe that the Laiban Dam deal is part of the ongoing battle between SMC president Ramon Ang and PLDT chair Manuel V. Pangilinan over the control of strategic industries in the country.
In a three-part article in the Philippine Daily Inquirer posted at inquirer.net, the SMC president expressed doubt that concern over the deal's structure was the root cause of the controversy surrounding Laiban.
"Some people are jealous because they did not think of it first," he said in an interview. "This deal is legal, aboveboard, and it will assure cheap water for Manila residents and jobs for Filipinos."
"The criticism [shows] crab mentality at work," Ang said. "I know who they are."
The San Miguel chief also said that he is even willing to have the competitive bidding process, which San Miguel won uncontested, reopened to accommodate his rival's bid and dared them to submit their own proposals.
"If anyone thinks they can do the Laiban project better than us, they're welcome to try. If they submit a better proposal, San Miguel will gladly let go," Ang said.
However, the PLDT group and Metro Pacific Investment Corp. chaired by Pangilinan denied being interested in the Laiban Dam project.
"We are not considering an investment in Laiban Dam. So in [this] respect of this project, there is no contest, no ‘tussle,' no competition from us," the same Inquirer report quoted Pangilinan.
But the wide-ranging issues - from water security and privatization, environmental impacts, water rate hikes, corruption, up to business rivalry - surrounding the Laiban Dam project, the government must first consider the consumers who are the main stakeholders in this controversy.
For environmentalists, the social, economic and environmental costs of building the Laiban dam are too high a price to pay for the purported benefits saying that "the cost of building large dams far outweigh the projected benefits."
Photo: “Lake 'n mountain” by Neo Delphi, c/o Flickr. Some Rights Reserved
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