MANILA, Philippines - Diversifying conglomerate San Miguel Corp. said yesterday it remains interested in pursuing its $1-billion unsolicited proposal to the government to build the Laiban Dam located in Tanay, Rizal as an alternative source of water supply for Metro Manila.
“Yes if public interest is concerned, Laiban must be built,” said San Miguel president
Ramon S. Ang when asked whether the food, beverage, and packaging giant was still interested in the Laiban Dam project.
Last month, San Miguel disclosed that it has “deferred the execution of any agreements relating to the Laiban Dam project” with the government.
The proposal has run into criticism from several organizations, who found the terms, particularly the take-or-pay provision, to be disadvantageous to the public.
A take-or-pay provision binds the buyer of water supplied by Laiban Dam to pay
even for water supply it has not consumed.
Ang said San Miguel has yet to hear from the Metropolitan Waterworks and Sewerage System on its proposal after the deadline to challenge it lapsed on July 8.
The MWSS earlier said it was still evaluating the unsolicited proposal from San Miguel unit San Miguel Bulk Water Co. Inc. and would continue to do so until the conglomerate submits a letter saying it was pulling out of the Laiban Dam project.
According to the MWSS, no other investors have come forward to challenge San Miguel’s proposal which aims to provide an average 1.83 billion liters a day of water supply for about 5.5 million people or 690,000 households in southern Metro Manila.
MWSS Administrator Diosdado Allado said the heavy rainfalls that caused the worst flooding in Metro Manila in more than four decades, brought about by tropical storm ‘Ondoy,’ had underscored the need for another water source such as Laiban.
A shortfall of 1,600 MLD is expected by 2015.
Allado earlier reportedly said the MWSS could do the Laiban Dam project on its own should San Miguel decide to withdraw its bid.
However, he said the agency, would need the government’s assistance to implement the project by raising MWSS’s borrowing capacity, which is pegged at P5 billion.
San Miguel’s announcement of putting the Laiban Dam project on hold was due to the negative publicity the conglomerate has been getting.
It also came on the heels of San Miguel’s acquisition of a 620-megawatt combined cycle power plant in Manila Bay. San Miguel has earmarked around $2 billion for its energy projects.
Ang earlier said San Miguel has done feasibility studies for the Laiban Dam for the past two years.
If the project is awarded to them, San Miguel will be teaming up with Toyota Tsusho, one of the largest trading companies in Japan, and Tokyo-based financial services group Orix Corp. to help carry out the project.
Toyota Tsusho is also San Miguel’s partner in a bid to acquire the Mariveles Grains Terminal, considered the country’s most modern grain handling facility. The Japanese firm has a worldwide presence through its many subsidiaries and operating divisions whose range of products include metals, machinery and electronics, automotive components, energy and chemicals, foodstuff and consumer products.
With operations in 26 countries and regions worldwide, Orix, on the other hand, is engaged in a number of activities which include leasing, corporate finance, real estate-related finance and development, life insurance, and investment and retail banking.
Orix will provide the technologgical know-how while Toyota Tsuho will provide the financial expertise as San Miguel hopes to enter into a joint venture with the MWSS to undertake the Laiban Dam project.