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Jun 29 2007
Supplied or written by Bobet Corral

NOTES:

(1)  THE LOCAL UNION IN CEBU/MCWD -- MEU/AGWWAS -- HAD BEEN VERY ACTIVE IN ITS OPPOSITION OF THIS UNSOLICTED BOT PROJECT; AND SINCE ITS REJECTUON, HAVE HAD SOME SUCCESS IN ESPOUSING ALTERNATIVE SCHEMES/PUBLIC-PUBLIC PARTNERSHIPS' BETWEEN THE WATER UTILITY AND LOCAL GOVERNMENTS IN BULK WATER SUPPLY.  NOW, ALL THESE EFFORTS WOULD BE FUTILE  IF JAPAN GOVT FLEXES ITS ODA MUSCLE TO RAM THIS PROJECT DOWN THE THROAT OF LOCAL OFFICIALS.  NEWSCLIP BELOW SAYS THAT MITSUBISHI COPR MADE THE FEASIBILITY STUDY OF THE PROJECT;  THIS IS INCORRECT.  IT WAS INTERNATIONAL FINANCE CORPORATION(IFC/WB) WHICH WROTE THE LARGELY BIASED STUDY;  WE IMMEDIATELY CITED CONFLICT OF INTEREST AS IFC IS ONE OF THE SHAREHOLDERS OF THE PROPONENT'S (AYALA) MANILA WATER CO/MWC;  MITSUBISHI IS ANOTHER MWC SHAREHOLDER.

(2)  SINCE BOT PROJECT WAS 'UNSOLICITED', THE PROPONENT COULD NOT CLAIM ANY 'PROJECT DEVELOPMENT COST' OR ADVANCES IT MAY HAVE MADE IN THE COURSE OF PREPARING THE FEASIBILITY (INC FEES TO IFC) AND OTHER 'PAYMENTS' (WINING/DINING LOCAL OFFICIALS, GOVT PERMITS AND OTHER TRANSACTIONS, ETC)

bY:  BOBET CORRAL/psiru

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June 2007

http://www.asiawateronline.com/news_show.php?language=english&n_id=1811

The Japanese government is urging the Philippine government to reconsider a decision rejecting the proposed P2-billion Carmen bulk water supply project in Cebu.

Japanese Ambassador Ruichiro Yamazaki in a letter to Finance Secretary Margarito Teves and Socio Economic Planning Secretary Romulo L. Neri justified the benefits of the proposed project because of the water crisis in Metro Cebu.

"The government of Japan believes that the realization of the said project is a step towards meeting the water demand of the cities and municipalities in metro Cebu. It also upholds our thrust to support economic development in the Philippines," Yamazaki said in the letter.

Aside from improving the water situation in Cebu, the project will likewise ease the worsening rate of aquifer depletion.

The feasibility study of the proposed project was conducted in 2004-2005 by the Mitsubishi Corporation in cooperation with the Ayala-led Manila Water Corp. through a fund from Japan’s Ministry of Economy, Trade and Industry.

The result of the feasibility indicated that if there is no development of new water sources, Metro Cebu, a city with high economic development potential, might not achieve its full potential.

"The development of the new surface water source without severe impact on groundwater is urgently needed. I truly agree with this view," said Yamazaki.

However, the Metropolitan Cebu Water District has rejected this unsolicited bulk water supply project under the Build-Operate Transfer scheme of the Ayala Corporation and Stateland Equity Ventures early this year for failure to submit a notice of acceptance within a specified period of time.

Article 10.9 of the Implementing Rules and Regulations of the BOT Law gives the proponent only 45 calendar days from receipt of the notice of approval to submit a letter of acceptance of the approved terms and conditions.

The Ayala-led consortium, however, is not yet giving up the project. It cfontested several provisions of the approved contract as recommended by the National Economic and Development Authority’s Investment Coordinating Council-Technical Working Group that caused the consortium’s failure to submit the requirements on time.

But socio-economic planning secretary and NEDA director-general Romulo Neri said NEDA the Finance department could not intervene in the transaction.

"It’s out of our hands. It’s really between them [the Ayala consortium] and the Cebu water district. I believe they are negotiating. We will no longer interfere in that project. It is an unsolicited bid and the responsible agency is the water district," said Neri.

The project proponent is reportedly demanding a refund for the R200 million development cost it spent for the project preparation should it cannot pursue the project.

The Carmen Bulk Water project will deliver up to 46,000 cubic meters of potable water to the Metro Cebu Water District under a 40-year build-operatetransfer (BOT) arrangement.

The project is expected to increase the water district’s current production capacity by about 26 percent, addressing the severe water shortage in Metro Cebu.

Source: Manila Bulletin



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