Bidding up for P18.7-billion Laguna Lake dredging project

MANILA, Philippines - A public bidding for the P18.7-billion dredging project for Laguna de Bay is in the offing following the decision of Finance Secretary Cesar Purisima to freeze it in the meantime.

Purisima earlier asked the Department of Environment and Natural Resources (DENR) to convert the project into a Public-Private Partnership (PPP) undertaking.

Meanwhile, Ambassador Christian Meerchman of Belgium has confirmed that his government has not granted any support or concessional funding for the Laguna de Bay project nor has it granted a governmental loan.

The P18.7-billion dredging project negotiated by DENR last Jan. 4 this year was to rehabilitate the lake to enhance its fresh water resources and at the same time prevent massive flooding whenever there is a storm as in the case of typhoon Ondoy in 2009.

If the plans for the project were to be followed, the project could bolster economic activities in the communities around the lake as well.

Originally, the project would be funded by commercial loans to be obtained through a Belgian bank by Baggerweken Decloedt En Zoon (BDC), the chosen contractor for the project.

Of the P18.7-billion project, P10 billion was earmarked for the dredging of the fresh water lake’s navigational lanes and would lower the water level by one centimeter.

The balance of P8.7 billion was to be allocated for the reclamation of certain sites in communities surrounding the 900,000-hectare lake.

Not included in the BDC project is the relocation of informal settlers, the reforestation of bay areas, waste-water treatment plans and the development of a ferry system within the lake.

A PPC undertaking as envisioned by Purisima could cure the problem and reduce costs through bidding under the PPP.

On Oct. 27, 2009, the Investment Coordinating Council (ICC) of the National Economic and Development Authority (NEDA) signed for the supply contract as endorsed by the regional development council (RDC).

It was on the account that the total cost would be funded by the Belgian government through its super subsidy fund.

On April 30 this year, then Finance Secretary Margarito Teves signed an agreement for an P18.7-billion commercial loan with BNP Paribas-Fortis Bank of Belgium.

Purisima said that instead of a purely dredging operation, the project could now be expanded to include tapping Laguna de Bay as a source of potable water for Metro Manila and its environs.

He said he has also given instruction not to withdraw the Belgian loan that was supposed to cover the project cost. “The Belgian loan is not yet withdrawn, but we are paying standby or commitment fees,” he stated.

The new finance chief also stressed that the project would remain on-hold until all the questions surrounding the DENR-BDC contract has been answered and the complications threshed out which could include a bidding pf the project.