Why borrow from China? Japanese dam is free, safe

Filipino and Chinese apologists of onerous China loans talk alike. Both dismiss as “nonsense” fears of Philippine surrender of sovereignty. Citing the same statistics, they belittle the loan amounts as easy to repay. It’s as if Philippine government and Chinese embassy spokesmen co-wrote the script. They also skirt, however, the basics raised by Supreme Court Justice Antonio Carpio and ex-congressman Neri Colmenares.

The issue is not whether the loans – $273 million, or P14.5 billion – are small. It’s about government’s waiver of immunity and natural resources. As Carpio warns of the P3.3-billion Chico River Pump Irrigation, China can grab the oil- and gas-rich Recto Bank in case of Philippine default. The loan’s Article 8 gives China a pick of patrimonial assets to garnish, except those in diplomatic, military, or common public use. Colmenares points up a similar Article 8 in the P11.2-billion loan for the Kaliwa Dam, this time with no limits on what China can take. The Philippines submits to arbitration under China laws if there’s dispute. With China to have two arbiters versus the Philippines’ one, the latter can never win: “lutong macaw (raw deal),” Carpio remarks.

Carpio pleads to not repeat the oppressive Article 8 as template in future China loans. Malacañang has declared to borrow up to $24 billion for infrastructures. That’s nearly half the P3.76-trillion national budget in 2019. What if the Big One strikes, the West Valley Fault quakes, Metro Manila is devastated and would need 50 years to recover, as experts forecast? Will that not trigger default of even wee debts, and China taking advantage? Pakistan and Nepal in late 2017 had rejected Chinese loans for dam constructions rather than yield patrimonial rights. Ecuador fell for China’s debt trap in a defective hydropower dam in 2016, and is now repaying with 80 percent of its oil produce.

Why borrow P14.5 billion at all from China? There are at least three reasons not to. One, state auditors say, the government spent only P222.66 billion of its P662-billion infrastructure outlay in 2017; meaning, there’s excess money for Chico River Irrigation and Kaliwa Dam. Two, government can raise P22 billion a year just by taxing Chinese online gaming in Manila, enough to cover the P14.5-billion, 25-year loans. Three, Europe and Japan offer softer loans for whole project amounts at only 0.25-percent interest, compared to China’s two percent yet only 85 percent of the works.

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In the Kaliwa Dam case, there’s a fourth reason to not borrow from China. A Japanese firm offers an alternative – cheaper for Greater Manila residents as water source, and at no cost to the government. Tribal folk need not be dispossessed, or forests inundated. President Rody Duterte’s men should tell him about it.

Tapping Kaliwa River in the Sierra Madres of Quezon had been planned 30 years back. The Metropolitan Waterworks and Sewerage Administration envisions a dam to supply 600 million liters per day (MLD). China Eximbank last year offered to lend, and picked a Chinese constructor – no public bidding. The latter designed a dam that would rise 73 meters high. A water tunnel would span 23 kilometers long. The cost deceptively was low at P12.5 billion. But that did not include a 12-kilometer access road, another P6.2 billion. Not included too are water treatment plants, which MWSS’ two private concessionaires must erect in Tanay and Teresa, Rizal, for P40 billion. Add those all up – P58.7 billion is the total that Filipino taxpayers and Greater Manila water customers must repay.

Yet as far back as 2009 a Japanese firm proposed to build not a dam but a weir. In a weir a barrier is built across the river to raise the water level upstream; water overflows the weir, while a dam has a special spillway. Global Utility Development Co.’s weir is to be only seven meters high, with less invasive 16-kilometer water tunnel. Cost is P21.7 billion, all in. Included is the water treatment plant. Output is 550 MLD, almost the same as the destructive dam. As a build-transfer-operate project, the weir will not cost the government a cent. GUDC wants only the right to sell the water to the concessionaries for 25 years, at MWSS-regulated rates.

GUDC’s weir is acceptable to the 6,200 Dumagat tribal families. None of them will be relocated from ancestral domains, some can even be employed in the waterworks.

In contrast, the Dumagat oppose the Chinese dam that will require ejection of 400 families from centuries-long tribal lands. It also will inundate the mountain forest, including the Tinipak white rock natural formations, falls, and park. Sitting on the Infanta fault, the dam threatens General Nakar town in Quezon below. Fifty-two Catholic bishops and leaders of other churches have petitioned against the monstrosity.

Meanwhile, Greater Manila’s east-south zone is in dire need of additional tap water. The Japanese weir quickly can be constructed. If approved today and all licenses are granted by July 2019, completion will be in 36 months, or June 2022. MWSS previously had approved the weir. For whatever reason, however, the government suddenly contracted a China loan. 

The Chinese dam will take 54 months to finish. That is, if it gets off the ground at all. Facing ejection and destruction of tribal lands, the Dumagat will never grant their free, open, informed consent. There can never be environmental clearance certificates.

In effect, the Chinese loan for Kaliwa Dam dooms the alternative water supply to 1.2 million Greater Manilans.  

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