Rushing to award secret dam project

This is yet another of the Arroyo admin’s “last two minutes deals.” It involves the Metropolitan Waterworks & Sewerage System (MWSS). And it mimics the secrecy that shrouded the ZTE scam two years ago, although this time the amount involved is seven times higher at $2 billion.

The MWSS is rushing to implement the Laiban water supply project without public bidding. All the rules have been broken or changed to suit the project. National security will be invoked to justify the undue haste and legal breaches. MWSS officers brag that they have the blessing of President Gloria Arroyo.

MWSS administrator Diosdado Allado is set to announce approval of a joint venture to execute the project in Tanay, Rizal. The plan is to build and operate the Laiban Dam under guidelines issued by the National Economic & Development Authority in April 2008. The little known NEDA rule now permits agencies to go into joint ventures with private firms for infrastructures and other projects. It skirts the tough requirements of the Build-Operate-Transfer Law, especially on the need for public tender.

The Laiban project, one of three alternative water sources for Metro Manila, has long been a NEDA priority. As such, the B-O-T Law can only award it by public bidding, never by unsolicited proposals. The new NEDA guidelines concoct a third type of project implementation, but with dubious legality. The President chairs the NEDA board composed of Cabinet members.

Laiban Dam construction will be finished in six years, near the end of the term of Arroyo’s successor. By then the project will create a monopoly in bulk water supply to the capital region for decades to come. This could drive up the cost of tap water. MWSS studies conducted 20 years ago state that Laiban will increase by 50 percent the supply of raw water at a cost of P18 per cubic meter, before inflation. In today’s money, that rate means P45 per cubic meter of water from the tap. MWSS’s two water concessionaires currently retail at P31-P33 per cubic meter.

MWSS insiders say a take-or-pay proviso like that with independent power producers will be inserted in the joint venture deal. This will further burden consumers. MWSS expects Laiban to produce 1,900 million liters per day of additional raw water. But this is based on monitoring conducted before the War. Recent estimates are that it will produce only half the additional water. But since the joint venture’s production charge will be based on the MWSS’s old figure of 1,900 while it will actually deliver only half, then consumers will pay for 100 percent but get only 50 percent of what they paid for.

During the Marcos years the MWSS initially estimated the Laiban Dam construction to cost $1 billion. Insiders calculate it to have doubled since then. The clincher is that the government will issue a sovereign guarantee of payment to the private contractor, no matter what happens. This is contrary to the B-O-T Law. But the MWSS board, composed of presidential appointees, will insist that national security necessitates the illegal issuance.

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Success has many fathers. And so legislators from both admin and opposition are claiming credit for the passage of a law making July 27, the Iglesia ni Cristo foundation day, a special working holiday. In truth, they’re only sucking up to the church whose members vote as a bloc and is thus politically influential. Not any legislator but a diligent House lawyer was responsible for getting the measure approved before Congress adjourned on June 3. Before that, the lawmakers had even forgotten about it.

The House had approved in Dec. 2008 its version of the bill filed in Oct. Transmitted to the Senate within a week, it got lost in the whirlwind of the revamp of the chamber’s leadership and committee chairmanships. The INC hierarchy had forbidden any member from following up on the bill, and so it gathered dust in the drawers.

On May 29 a friend innocently asked the House lawyer about the bill. The latter made inquiries at the Senate, but met dead ends from quizzical counterparts. On June 1 Senate staffers finally found the bill and had it passed swiftly the next day. The lawyer shepherded its transmittal back to the House for simultaneous ratification of the final version by the two chambers late on June 3, Now the INC knows who its real friends are — not the politicos but the silent workers in committee staffs.

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