Bracing for water competition

Amid persistent reports of declining water level of La Mesa Dam, the Metropolitan Water and Sewerage System (MWSS) sought to assuage consumers in Metro Manila and suburbs there is enough water supply. That is, once the Kaliwa water dam in Quezon Province is completed by 2023. Metaphorically speaking, MWSS administrator Reynaldo Velasco doused cold water to these fears fueled by the continuing decline of the water level in La Mesa Dam.

Velasco announced the MWSS is on track with its timetable on the P13.43 billion New Centennial Water Source – Kaliwa water dam project. It is one of the flagship projects of the administration of President Rodrigo Duterte through official development assistance from China. The project is funded through a bilateral agreement President Duterte signed with Chinese President Xi Jinping in October 2016 during his state visit to Beijing.

Velasco explained the Chinese government committed P10.2 billion in official development assistance (ODA) to fund the Kaliwa dam project. The balance of the total project cost will be shouldered by the MWSS out of its own resources coming from fees collected from their concessionaires.

Since this is a “tied” loan, he stressed, only contractors from China can bid in this project. He confirmed three Chinese firms have been pre-qualified to bid in the construction of the Kaliwa Dam, namely: China Energy Engineering Co. Ltd.; Power China Ltd.; and the consortium of Guandung Foreign Construction Co. Ltd. and Guangdung Yuantian Engineering Co. Ltd. The three Chinese firms were nominated by the China Ministry of Commerce, through their embassy in Manila headed by ambassador Zhao Jianhua.

Based on the MWSS timetable, a pre-bid conference was already held last April 16. The MWSS Board set on May 11 the submission of bids. However, Velasco disclosed, the MWSS may have to reschedule the award and signing slated this August upon request of the Chinese contractors who asked for more time to submit other required documents and permits.

According to Velasco, an inter-agency body directly under the supervision of the Office of the President is making sure the dam project does not suffer further delays. It took 30 years for this project to finally take off.Velasco disclosed the dam – once operational – will provide an additional 650 million liters of water a day (mld) to augment the 4,000 mld from Angat Dam in Bulacan.

“We have to keep monitoring the demand for water supply. We cannot oversupply water because the excess costs will be shouldered unnecessarily by the customers,” Velasco pointed out. Aside from Kaliwa Dam, he added, the MWSS is also overseeing the construction of tunnels that will serve as conveyance of water coming from Laiban Dam, Wawa Dam, and the Kanan Hydroelectric Dam which is slated to be completed in 2026.

These projects, he noted, have been there since Marcos’ time. “It is just now during the Build, Build, Build project under the Duterte administration, that these (dams) are being constructed,” the MWSS chief said. “We are reviewing which of these projects will be the least cost to the people,” he stressed.

The reassurances of MWSS chief were taken with wide grins – if not with a grain of salt so to speak – by the respective chief operating officers (COO) of Manila Water Geodino “Ding” Carpio and Randy Estrellado of Maynilad Water. Both MWSS concessionaires Manila Water and Maynilad draw their water supply from La Mesa and Angat Dam for their consumers in Metro Manila.

The Ayala-owned Manila Water covers the north-eastern part of Metro Manila and Rizal while Maynilad – run by the Manny V. Pangilinan (MVP) Group of Companies – serves the western/southern part of Metro Manila and Cavite.

We had a good laugh in our Kapihan sa Manila Bay last Wednesday at Cafe Adriatico in Remedios Circle where we featured the MWSS chief along with the two COOs when we tackled the issues of water security.

Or, was it nervous laughter over possible water shortage in Metro Manila not because of climate change but due to something else?

A retired police general, Velasco – who now heads the nine-man MWSS board – conceded water security in Metro Manila indeed faces threats related to the effects of climate change. Called El Niño phenomenon, the MWSS chief noted the prolonged summer heat gave rise to such water shortage fears.

Proof of which, Velasco cited, a third water concessionaire in Bulacan – run by Ramon Ang’s San Miguel Corp. (SMC) Group – also draws water from Angat Dam. The SMC, together with Korea Water Resources Corp., were awarded the project in January 2016 after they offered the lowest cost of P8.50 per cubic meter.

The Bulacan Bulk Water Supply Project, the first water project awarded under the public-private partnership (PPP) program, is a 30-year concession deal. Under the agreement, the SMC-K Water group will build and maintain the conveyance and treatment facilities and the water source to serve 21 municipalities and three cities, and to benefit a total of 3.4 million residents.

Velasco’s example of the third water user of Angat Dam perhaps elicited the nervous giggles from both Manila Water and Maynilad COOs.  It’s like having a third waterco in the same mold of the third telco soon to operate in our country where both the Ayala Group and the MVP Group figure anew in competition in the market.

In the case of the Ayala Group, Manila Water’s wholly-owned subsidiary Manila Water Philippine Ventures recently received the notice of award from the Balagtas Water District for a 25-year concession which will implement water and used water projects amounting to P400 million in Balagtas, Bulacan.

For the MVP Group, Estrellado cited they have to deal with still high system losses when they took over the Maynilad ten years ago from the Lopez Group of Companies. Thus, Maynilad is still coping with old pipes, leaks, pilferage, and other non-water revenue losses.

More than the feared water crisis, both Manila Water and Maynilad are bracing for more water competition while waiting for completion of these dam projects.