It all boils down to governance




By Rose de la Cruz


Unsolicited suggestions from some sectors to return the operations of utilities back to the government are the most bizarre and un-studied prescriptions that only belie the ignorance of those pounding on it.


Firstly, time and again the government’s operation of utilities have never been reliable, to be trusted in terms of quality, timeliness and service delivery and neither has it shown any compassion for consumers who are paying stiffly for the utilities.


Just because a company like the Manila Water Company experienced shortcomings in its delivery of water to majority, but not all, its concession users, did not mean that it had to be replaced outright, by the Metropolitan Waterworks and Sewerage System (MWSS or NAWASA in the past). Prudence dictates that government must make sure that the concessionaire regains its capacity to deliver such commodity to its users.


People are unkind to the concessionaire—without thinking of the massive billions of pesos, even dollars it invested to improve the pipes and reduce the systems’ losses—and the government (MWSS and the National Water Resources Board) itself had failed in giving the Ayalas the support it needs to explore and tap new water sources to augment its current supply from Angat Dam.


They waited for the worst to come and when it finally did, the government crushed Manila Water to the ground while elevating the other concessionaire—Maynilad—to high heavens because it did not have to resort to water disruptions and rationing, as if to show its favor for the latter.


The real picture


Erick Reyes, who once headed the human resource and corporate communications group of Manila Water, posted on Facebook the real score about Manila Water.  


When the administration of former President Fidel V. Ramos privatized MWSS, the two concessionaires were beset with huge challenges right at the start, foremost of which was the systems loss or what we call NRW (non- revenue water) that stood at a staggering 63%.


It means for every 100 liters of water they get from Angat dam and treated in the filtration plants, 63 liters were either stolen or simply lost to physical leaks in the pipes. Only 37 liters reach the customers.


So, how do you serve the customers, grow the business, and conserve the water all at the same time without a new water source? Reduce the NRW and use the water saved from the system to grow and serve the customers. Easier said than done.


The first decade of MWC saw a fanatical devotion to reduce the systems loss. From simple leak repair to actual pipe replacement. An accompanying territory management system was also put in place. It resulted to a reduction of the NRW from 63% to world class 12%. This is equivalent to around 800 million liters of water per day. It was like building a new dam by itself without cost to the government. This information is always met by applause all over the world.


I guess it is about time the government do their share by ensuring water security.


It is normal and understandable that in times of crisis, the focus is the immediate short- term solution. Now, it is time to think long term.


A Mabel Soriente answered with: “ I agree that a big amount of investment was allotted to the non- revenue water (NRW) Management program. This is a major problem that the two concessionaires inherited from the old MWSS. I just wonder why the agency failed to address this during their time. 63% NRW is not just a waste of money but waste of our natural resources too.


Then, Remedios Espinosa Gaurino retorted: “the experts say that Laiban Dam is the most beneficial and optimal source but why is the government now saying that they will discard Laiban and just push on the Kaliwa. Will the present administration please look on the history and listen to the recommendations of experts/consultants long before they come in.


And finally, Maria Luisa B. Pangilinan said “China is the answer.” China is the one being tapped to provide a commercial loan to build the Kaliwa dam (coming from the Kaliwa river, a pristine water source from the Sierra Madres that supply most of Quezon, Laguna and Rizal and such dam venture is now being vehemently opposed by residents and environmentalists because it would destroy the ecological systems).


China loan


Only heaven knows how much those in power right now would earn from the Chinese loan for the Kaliwa dam project, when the Japanese are offering to fund with at no interest charges. The $211.21-million loan from China carries an interest rate of two percent per annum, payable in 20 years, including a grace period of seven years. It covers 85 percent of the project’s contact amount and carries a management fee of 0.3 percent as well as a commitment of 0.3 percent per annum.


Already a coalition of 29 pro-environmental groups and advocates strongly oppose the Kaliwa project because the China-funded project would put people’s lives at risk, destroy the biodiversity in the area and tie the country to an ‘onerous’ loan.


The Kaliwa Dam project, a $211.21-million loan from China, is being touted as a solution to Metro Manila’s water requirements. But for Sectors Opposed to the Kaliwa Dam (STOP Kaliwa Dam), the government is just using the shortage in water supply to “aggressively promote” the controversial project.

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The STOP Kaliwa Dam movement stressed that the project failed to secure consent from the Dumagats and Remontados who own the land as required by the Indigenous Peoples Rights Act.


“In fact, the IP leaders in the area have questioned the Free, Prior and Informed Consent process currently being undertaken by the National Commission on Indigenous Peoples because they were not provided with copies of relevant documents from the Metropolitan Waterworks and Sewerage System as project proponent which are essential for evaluating and making informed decisions,” the groups said.


They also said that the Environmental Management Bureau of the Department of Environment and Natural Resources has not yet issued an Environmental Compliance Certificate, which is needed for any project that poses a potential risk to the environment.


The groups, moreover, said that the construction of the access road to the dam site violates the law since it has no permit from the Protected Area Management Board and the local government unit of Infanta, Quezon.


The coalition said “building a mega dam in the area will cause irreparable damage to the surrounding ecosystem and endanger [and] devastate animal and plant life.


Proclamation 573 declared the Kaliwa Watershed a forest reserve and Proclamation 1636 declared a portion of the area a National Park and Wildlife Sanctuary.


Citing information from the Haribon Foundation, the groups said the Kaliwa Watershed is home to the endangered Northern Philippine Hawk-eagle, Philippine Brown Deer, Philippine Warty Pig, vulnerable Northern Rufous Hornbill, critically-endangered Philippine Eagle and restricted-range birds of the Luzon


The groups also said that dam reservoirs are “significant” source of greenhouse gas emissions. “As one of the countries suffering the brunt of climate change impacts, from devastating typhoons to prolonged dry spells, it would be irresponsible and irrational to fund a project that will exacerbate climate change,” they said.


“Construction of the dam will inundate the Barangay Daraitan in Tanay, Rizal with a population of 1,000 households and 500 households from Pagsangahan, General Nakar, Quezon. This will mean the loss of significant income for the area due to the loss of eco-tourism which has seen a boom in recent years,” they said.


The town of Infanta will lose the benefit of sediment-carrying river flows, which will then affect irrigation to rice paddies, they added.


STOP Kaliwa Dam also said that the project will endanger the lives of people as the mega dam will be constructed within the zone of two active tectonics—the Philippine Fault Zone and the Valley Fault System.


Patrimonial assets


Supreme Court Senior Associate Justice Antonio Carpio argued that Kaliwa Dam project also offers patrimonial assets as collateral.


But Finance Secretary Carlos Dominguez said the Philippine government does not need to surrender any of its assets to China in case the country fails to settle its obligations on infrastructure projects.


“In conformity with the constitution and laws of the Philippines, none of the pipeline projects allow for appropriation or takeover of domestic assets in the event of failure to pay which hollows out our sovereignty,” Dominguez said.


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.  


Possible water sources


In a 2012 report, the World Bank listed at least 19 other possible water sources for Metro Manila, Kaliwa Dam.  For instance, Laiban Dam, found upstream from Kaliwa Dam, could boost Metro Manila’s water supply by an additional 1,800 MLD. But the government said it has no plans of pursuing it because of the “social engineering nightmare” it entails.


Even if Kaliwa Dam were necessary, it need not be funded by the Chinese government and built by a Chinese firm. A Japanese firm, Global Utility Development Corporation (GUDC), has in fact been offering to build an intake weir along Kaliwa River instead of a full-blown dam.



The advantages of the weir are: 1) despite being just 7 meters high (not 62 meters like a full-blown dam), a weir could provide an extra 550 MLD to Metro Manila, not far from the 600 MLD that Kaliwa Dam is expected to produce; 2) its low height means it won’t have to inundate the surrounding areas, thereby avoiding the displacement of people in nearby Daraitan village and disrupting the flow of the Kaliwa River; 3) the weir will only take 3 years to construct, whereas a full-blown dam might not be finished until after the Duterte administration has passed; 4) the GUDC was offering to construct it 50% cheaper and under a “private finance initiative,” which means the firm will bear all upfront costs and risks. In contrast, the Kaliwa Dam project is financed by a Chinese government loan that carries a 2% interest rate, which is about 8 times higher than what Japanese loans typically offer.