Gov’t to save P4.2-B on Kaliwa Dam project due to China ODA

By Joann Villanueva

March 20, 2019, 8:12 pm

MANILA -- The Philippine government will save as much as PHP4.2 billion in the construction of Kaliwa Dam with the help of an official development assistance (ODA) loan from China compared to a private sector financing.

This was pointed out by Department of Finance (DOF) Assistant Secretary and spokesperson Tony Lambino in a briefing with journalists Wednesday.

He explained that the construction of the Kaliwa Dam has been a government proposal since 1970s but it somehow never materialized until the NEDA Board approved the New Centennial Water Source-Kaliwa Dam Project on May 29, 2014.

He said there have been several proposals on how to implement it and these included an unsolicited PPP (public-private partnership), which were thumbed down by authorities, noting that under the BOT Law projects included in the government’s priority projects shall not be eligible for acceptance as unsolicited proposal unless it involves a new concept or technology.

He noted that a private entity, Global Utility Development Corporation (GUDC), offered to implement the project through unsolicited PPP but this is only for the Kaliwa Intake Weir, which is only a portion of the whole project.

He said “a weir would have made the project incomplete and unable to address the long term needs and the water shortage problems we will continue to face into the future”.

Thus, in one of the meetings of the Investment Coordination Committee (ICC), which consists of the Secretary of Finance, the National Economic Development Authority (NEDA) Director General, and the Executive Secretary among others, the Committee directed officials of the Metropolitan Waterworks and Sewerage System (MWSS) to undertake the project using the agency’s funds.

In January 2014, the NEDA-ICC restructured the project component from ODA to PPP and estimated the cost at around PHP18.7 billion but nothing happened until MWSS officials, in January 2017, indicated the possibility of financing the project though an ODA loan from China.

In March of the same year, the NEDA-ICC approved the shift of project financing from PPP to ODA and the NEDA Board confirmed the IIC approval three months later or in June 2017.

With this shift, Lambino said the government will have “significant” savings from the original estimated cost.

“In fact, pursuing the Kaliwa Dam Project through ODA resulted to a significant decrease in estimated project cost from PHP18.7 billion under the PPP scheme to PHP12.2 billion through ODA. Or if you want to include all fees and interest payments, PHP14.5 billion,” he said. (PNA)