Updated Mar 25, 2019, 3:25:00 PM
This story was updated to include the side of the government.
Lede: The Department of Finance refutes the Japanese company's data that the China-funded project will cost $800 million, saying the dam's construction will cost around $300 million including interest and fees.
Metro Manila (CNN Philippines, March 18) — A Japan-based company on Monday asked the government to revisit a safer and cheaper option to increase water supply to Metro Manila that will tap the same resources under a Chinese-funded dam project.
Osaka-based infrastructure firm Global Utility Development Corporation (GUDC) asked President Rodrigo Duterte to push through with its proposed construction of a low-level dam in Kaliwa River.
This comes after the Duterte administration awarded the New Centennial Water Source Project (NCWSP) Kaliwa dam to a Chinese construction company.
GUDC said compared to the dam project, the weir or low-level water intake will address safety concerns and will be more economical for the government.
What is the Kaliwa Weir Intake Project?
Under GUDC's proposal, a seven-meter wall will be constructed in the middle of Kaliwa River in Tanay Rizal near the Infanta, Quezon border. It will work like a barrier to raise the water level.
Unlike bigger dams, water would spill over the wall and flow to an aqueduct that will divert water to a treatment plant in Tanay, Rizal. where water concessionaires may tap up to 550 million liters of water daily.
At seven meters high, the Japanese project is much smaller than the 73-meter high dam awarded to the Chinese firm. Its capacity is 50 million liters lower than the NWSCP Kaliwa Dam.
"We cannot understand why MWSS wants such high dam, we need only 600 MLD (million liters per day). It does not make common sense," GUDC chief operating officer Toshikazu Nomura said.
Putting up a lower dam which would allow river to flow also ensures the safety of nearby communities, GUDC vice president for business George Campos explained.
Campos said their project does not pose environmental threats as this will be constructed far from the fault line. No one will be displaced or inundated since the water level would only increase by seven meters, below the residential area.
GUDC will also pay for the whole of construction. All it needs is a go signal from the Philippine government
What happened to the Japanese's proposal?
GUDC has signed an agreement with MWSS in 2009. Construction would only supposedly take less than a year. But Campos said the changes in national leadership as well as the MWSS administration have pushed back its implementation.
If the construction began then, Campos said Metro Manila would not have a water supply problem.
Meanwhile, Nomura said they submitted a proposal to the government in 2017, but the project did not move forward because someone "pressured" the MWSS.
"We submitted our proposal in September 2017, and then they found this is accepted but somebody in your government gave pressure and that's why MWSS could not move at all. On the other hand, the new centennial project started one and a half years ago," Nomura said.
Presidential spokesperson Sal Panelo said concerned government agencies are looking into the proposal.
"I think every proposal should be considered. The objective should always be the welfare of the people. The most beneficial, the most advantageous to the govt and to the people should be the primordial consideration," he said in a media briefing on Monday.
On the other hand, Metropolitan Waterworks and Sewerage System (MWSS) Administrator Reynaldo Velasco said the government's arrangement with China on Kaliwa dam has been sealed.
"Ito ay na-bid na, gagawin na. Hindi na yan pupuwede, lalong made-delay. Naka-commit na ang gobyerno. Nagkapirmahan na tayo. This is a done deal," he said.
[Translation: This has been bid. It cannot be further delayed. The government has committed and signed. This is a done deal.]
Velasco also said they could not entertain GUDC's proposal in 2017 because the Kaliwa Dam project is already underway.
He also denied being pressured into the decision.
"I don't think the board would ever be pressured. There's no such pressure," he said.
An official of the MWSS also said the two projects cannot be compared. GUDC's weir cannot hold as much water as the dam, and it would be a problem when the dry season comes.
While the government asserts Kaliwa Dam construction only cost $248 million, GUDC is adamant, the project would eventually cost the government $800 million.
Campos says the cost of NCWSP-Kaliwa Dam, now pegged at P12.2 billion, is only for building the dam and tunnels. The budget does not include the construction of water treatment plants which could cost an additional $560 million.
“Based on engineering estimates for two distinct and separate water treatment plants with capacity of 1,200 MLD (million liters per day) each (MWSS design) = $560M,” Campos explained.
Campos added “There must be a WTP (water treatment plant) to be able to supple treated water to the consumers”.
Campos also noted that Kaliwa Dam could supply 600MLD, while Laiban Dam would provide 1800 MLD. But MWSS has announced on March 18, the second phase of the New Centennial Water Source project, which includes the Laiban Dam construction is under review because of concerns this might affect 4,800 families.
“The MWSS is over designed because no Laiban Dam will be constructed,” said Campos. “Cost of the unused capacity of the dam and tunnel and WTP will be shouldered by the consuming public through higher water rates.”
"Based on engineering estimates for two distinct and separate water treatment plants with capacity of 1,200 MLD (million liters per day) each (MWSS design) = $560M," Campos explained.
Campos added "There must be a WTP (water treatment plant) to be able to supply treated water to the consumers".
Campos also noted that Kaliwa Dam could supply 600MLD, while Laiban Dam would provide 1800 MLD. But MWSS announced on March 18, that the second phase of the New Centennial Water Source project — which includes the Laiban Dam construction — is under review because of concerns it might affect 4,800 families.
"The MWSS is over designed because no Laiban Dam will be constructed," said Campos. "Cost of the unused capacity of the dam and tunnel and WTP will be shouldered by the consuming public through higher water rates."
Gov't denies GUDC claims
The Duterte administration defended its decision to pick the China-funded project, saying it will be more beneficial to the public in terms of cost and subsequent fees charged to customers.
Finance Assistant Secretary Tony Lambino also refuted the claim of GUDC that the Chinese-funded project will cost $800.
He said said it would have cost P18.7 billion under a public-private partnership (PPP) arrangement, but the ODA has reduced the amount to P12.2 billion. The final tab could reach P14.5 billion with the 2 percent interest per year, but it will still be a better deal, he added.
In dollar terms, with fees and interest payments included, Lambino said the total price would fall between $280 million to $300 million, depending on the peso-dollar exchange rate.
The Japanese firm said the NCWSP dam and tunnel will cost $240 million plus $560 million to construct two water treatment plants. Lambino said cost of constructing the water treatment plants will not be shouldered by the government, instead, the water concessionaires will pay for it.
He also told CNN Philippines that the $410 million pegged by GUDC to be its project cost is incomplete as the project will only construct a 16 kilometer conveyance tunnel and will need an additional 11.7 kilometers to connect the water source to distribution.
He said the China-funded Kaliwa Dam will build a 27-kilometer tunnel that will connect the water source from General Nakar-Infanta in Quezon to a water treatment plant in Antipolo-Teresa in Rizal to supply 600 million liters of water per day to Metro Manila and nearby areas.
The Finance official also countered other claims on funding. While the government wouldn't spend under the PPP, consumers will ultimately bear the burden, Lambino said.