Aboitiz Group to proceed with Davao hydro project

MANILA, Philippines - Despite the prolonged dry spell, the Aboitiz Group is confident that it would be able to push through with its 27.5 megawatt hydroelectric power project in Davao.

Hedcor Inc. director Jose Venancio Batiquin said that they are seeing some positive developments in the company’s talk with the Davao City Water District (DCWD) on disputes over the use of water resources in the province.

Hedcor is the hydro development unit of the Aboitiz Power Corp., the power generation arm of the Aboitiz group. It is part of a consortium that won the competitive bidding for the 12-year agreement to supply electricity to Davao Light and Power Co. Inc. “Hopefully we will get an agreement by the end of this month to develop Tamugan,” Batiquin said.

According to the Hedcor official, DCWD is more amenable to the project now “in the spirit of cooperation” in the wake of the power shortage in Mindanao.

DCWD supplies water to 150,000 customers in Davao.

The Aboitizes and DCWD have disagreements over the threat of limited supply of water in Davao City, if a power facility will be allowed to use the water resources. It claimed that the Tamugan River is the only viable source of water for Davao City.

But he said they may have to revise some of their permits for the Tamugan project because they have to “re-design the project to accomodate the concerns of Davao Water.”

“There might also be some downscaling (of the project capacity),” the official said.

The proposed Tamugan power project consists of two cascading run-of-river hydropower generating facilities: the upstream 7.5 MW Panigan Plant, and the 20MW Tamugan Plant.

The projects will use the natural waterflow of the Panigan and Tamugan Rivers.

Based on the original plan, Hedcor will build three run-of-river hydro plants with a combined capacity 34.5 MW hydro plants (composed of Tamugan, Panigan and Suawan) but decided to abandon the 7MW Suawan component due to project cost escalation resulting from delays in securing the necessary permits.

The reduction in capacity of the power plant cut the project cost to P5.5 billion from the original estimate of P6 billion to P7 billion.

As this developed, Hedcor had commenced the testing of the first unit of the 42.5MW Sibulan hydropower project in Sta. Cruz, Davao del Sur. The Sibulan plant is estimated to cost P3.5 billion.

The Sibulan plant is envisioned to meet the peak demand of power utility firm, Davao Light.

At present, Davao City is now suffering from three-hour blackouts per day while outside of the city, the power shortage is worst at six to seven hours per day.