SMC closes in on Laiban Dam Deal

July 17, 2009 05:14:00
Riza T. Olchondra
Philippine Daily Inquirer

MANILA, Philippines — No other company has been able to match the proposal of San Miguel Bulk Water Co. Inc. (SMBWCI), a unit of the giant San Miguel Corp., for the $1.1-billion Laiban Dam project but officials said the award of the contract to SMBWCI was “not yet a done deal.”

The window for potential challengers to SMBWCI—which submitted an unsolicited proposal for the construction of the dam in Tanay, Rizal—closed with the Metropolitan Waterworks and Sewerage System (MWSS) not receiving so much as a single letter of intent, said MWSS deputy administrator Isaias P. Bongar Jr.

The MWSS can therefore pursue negotiations with the SMBWCI as the lone bidder, although the agency can still negotiate for new contract terms even after the project is awarded, Bongar said.

But because of the controversy that has arisen, Bongar said the MWSS would seek an opinion from the Office of the Government Corporate Counsel (OGCC) if an invitation to challengers to the SMBWCI can be put out again.

Subject to evaluation

OGCC head Alberto C. Agra Thursday said that although the SMBWCI is the only company left to negotiate with, the deal would still be “subject to evaluation.”

Concerns have been raised by legislators, social activists and even the National Economic and Development Authority (NEDA), the government’s central planning agency which vets all big-ticket projects, over the alleged haste and secrecy in which the deal was being arranged.

Socioeconomic Planning Secretary Ralph Recto, who heads the NEDA, said the agency was never informed nor consulted about the proposal.

Recto’s misgivings

Moreover, Recto has misgivings about a take-or-pay provision in the proposed agreement that is similar to the infamous contracts with independent power producers in the 1990s under which the state generator was obliged to buy power produced by the IPPs even if these would not be used.

Recto said this virtually meant that government would be “guaranteeing the market risks of the private proponent.” This would burden consumers with high water rates as the IPP agreements did in relation to power rates, he said.

NEDA also expressed concern that the SMBWCI did not seem to be open to negotiating the “take or pay” provision.

Various politicians warned of an “NBN-ZTE-type” scandal, referring to the scrapped deal to award the national broadband network contract to China’s ZTE Corp. because of allegations of corruption.

A plan to construct the Laiban Dam in the Kaliwa River basin in Tanay to provide an alternative water source for Metro Manila had been proposed as long ago as 1979, according to the MWSS. The idea was abandoned in 1989 because of the huge cost involved, among other reasons.

Last February, San Miguel submitted an unsolicited proposal to construct the dam, on a joint venture basis, which the MWSS said would “not require a single centavo from government.”

The dam, when finished, will provide an average 1.893 billion liters of water a day for some 5.5 million residents of Metro Manila and surrounding provinces by 2015. The project would also include a hydropower plant to supply 25 megawatts of electricity.

Swiss challenge

In early July, the MWSS published announcements for potential Swiss challengers to the San Miguel proposal to indicate their interest by July 9, and gave them a month to submit a competitive proposal.

Under the Swiss challenge form of public procurement, a government agency which has received an unsolicited bid for a public project or services to be provided to government, to publish the bid and invite third parties to match or exceed the unsolicited proposal.

Bongar said the 30-day deadline was reasonable since “only companies with expertise” should be bidding for the project.

Water distributors Manila Water Co. and Maynilad Water Services were ruled out of contention because of the rule against cross-ownership to avoid a monopoly situation.

“A wholesaler or bulk water provider in a certain area cannot be a distributor in that same area and a distributor cannot be a wholesaler,” Bongar explained.

Baseless allegations

In a press statement Thursday, MWSS Administrator Diosdado Jose M. Allado said the allegations against the MWSS over its handling of the San Miguel proposal were “baseless, imprudent and reckless.”

“There’s absolutely nothing secret or sinister, illegal and inappropriate about this project. It is a pro-active government initiative that seeks to address the water supply demand of Metro Manila in 2015, and to prepare for the inevitable deterioration of the only source of water for Metro Manila, the 41-year-old Angat Dam reservoir,” he said.

He explained that a joint venture seemed to be the best option for the government as the MWSS can no longer obtain loans because of the old loans it had incurred when it was still the sole water distributor.

As for the NEDA’s opposition to the “take or pay” provision, Allado said this would not constitute a government guarantee since it does not ensure payment for loans which the private company would incur for the project.

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Filipino Scientists Develop Tech: Harnessing Solar Power for Clean Water

First Posted 19:49:00 06/16/2009
Alexander Villafania
INQUIRER.net

MANILA, Philippines-Filipino scientists are now trying to harness solar power to eliminate pesticides in contaminated water.

The Department of Science and Technology's Industrial Technology Development Institute (DOST-ITDI) is now embarking on a project to develop a technique dubbed as wastewater detoxification to also help the handicraft industry reduce contamination of water.

ITDI Chief for Environmental Division Dr. Christopher Silverio is now leading a team to develop this technique called “solar photocatalysis,” which uses solar energy as primary catalyst in removing toxic dyes in water.

Silverio’s team is using a non-toxic chemical called titanium oxide to help break down pollutants in the water.

Silverio explained that solar photocatalysis occurs when a small amount of light-absorbing material, which serves as the photocatalyst, reacts with pollutants without being destroyed itself.

Current photocatalysis technologies use ultraviolet, an electromagnetic light radiation largely given off by the sun.

What the Filipino scientists have develop was a technology that runs wastewater in a clear tube lined with titanium oxide. The tube is then exposed under the sun.

Silverio said that the technology itself is inexpensive and can be applied in areas with wastewater.

Photocatalysis has been used in several industrial applications, including self-cleaning glass, oxidizing organic contaminants and conversion of carbon dioxide.

 

Slight cut in Manila Water rates in July

June 16, 2009 20:49:00
Riza T. Olchondra
Philippine Daily Inquirer


MANILA, Philippines -- Starting July 2, water rates for the Manila Water Company Inc. (MWCI) customers will be slightly cheaper.

The publicly listed company said in a notice to consumers that it was trimming the foreign currency differential adjustment (FCDA) component of the water bill by a centavo. That is, the FCDA rate will decline to 21 centavos from 22 centavos.

Consumers with low consumption are not charged at all.

Households that fall under the average monthly consumption of 30 cubic meters will enjoy a 13-centavo cut in their water bill to P444.49 from P447.62.

Commercial users, or those who consume about 10 cubic meters a month, will save P1.33. Their water bill will be reduced to P4,474.43 from P4,475.76.

The recent strengthening of the peso to P48.217 from P49.186 to the dollar enabled MWCI to lower the FCDA.

Company spokesperson Jeric Sevilla said that the FCDA rate cut could have been higher if other currencies like the yen did not appreciate as well.

The FCDA is a mechanism which allows Manila Water to recover foreign currency losses or pass on foreign currency gains resulting from payments of concession loans and foreign-currency denominated borrowings for service expansion and improvement.

"Such tariff adjustments have no real significant impact on the projected income of the Manila Water Company," the company said.

The latest FCDA rate cut at least demonstrated that the pass-through mechanism worked, Sevilla said.

"The FCDA adjustment simply shows that water services in the country are stable and still affordable despite the recent increases in oil prices. We also want to assure our customers that the FCDA rate is reviewed quarterly and changes are promptly reflected," Sevilla said.

The Metropolitan Waterworks and Sewerage System had approved Manila Water's proposed FCDA cut on June 5, 2009 through Board Resolution No. 09-006-CA.

"In line with the government's program to protect low-income households, residential customers consuming 10 cubic meters or less a month will still be exempted from paying the FCDA," Manila Water said.

Manila Water chalked up 1.04 million households in its client base as of the first quarter of 2009.

The company's net income reached P622 million with water sales of 93.7 million cubic meters.


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Rolly Peña:

2009 Outstanding Professional of the Year Award in the Field of Geology

As quoted from Professional Regulation Commission (PRC), "The Outstanding Professional of the Year Award is the highest award bestowed by PRC upon a professional as recommended by his/her peers for having amply demonstrated professional competence of the highest degree and conducted himself/herself with integrity in the exercise of his/her profession, participated meaningfully in professional activities through the professional organization, contributed significantly to the advancement of the profession, and contributed significantly to the effective discharge of the profession's social responsibility through meaningful contribution/ participation in socio-related activities."

The awarding ceremonies will be held on 19 June 2009, 5 p.m. at the Fiesta Pavilion, Manila Hotel.