POSTSCRIPT / July 25, 2006 / Tuesday

By FEDERICO D. PASCUAL JR.

Philippine STAR Columnist

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After Masinloc, MWSS can't afford similar mess

LOOMING CRISIS: The integrity of public biddings for major government projects and assets is going through another acid test in the long-delayed building of a 300-MLD (million-liters-a-day) bulk water project in Laguna de Bay.

The Metropolitan Waterworks and Sewerage System started way back in 2004 the prequalification process for bidders for the water supply project, but until now not much has moved.

It seems that the jockeying by some bidders for favored positions at the starting gate is delaying things.

You must have seen the advertorial days ago in PhilSTAR with the grim message of concerned citizens that five million residents of Metro Manila may run out of potable water by 2009 — unless work starts in earnest NOW for that bulk water project.

We are a million miles from the Sahara but the maneuvering outside the bidding process may just set back the timetable and turn half of Metro Manila waterless three years from now.

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WAR OVER WATER: The project would provide additional 300 MLD for residents of Western Quezon City, Southern Caloocan, some Manila suburbs, Valenzuela, Malabon, Navotas, Pasay, Parañaque, Las Piñas and Western Muntinglupa.

They are in the west zone of the MWSS concession area that was awarded to Maynilad Water Services Inc., a Filipino firm formed by the Lopez holding company Benpres in joint venture with the French firm Lyonnaise des Eaux.

(After disastrous losses, Maynilad now under Dr. Fiorello Estuar as caretaker manager has returned the concession to MWSS. The contract will be rebid shortly, with Lyonnaise expected to sell its minority share to the winning bidder.)

The crisis threatening Asia’s oldest water system was diagnosed as early as 1991 by the Japan International Cooperation Agency. It listed Metro Manila among the “water critical areas” in the country, along with Cebu, Davao, Baguio, Iloilo, Angeles (Pampanga), Cagayan de Oro, Bacolod ( Negros Occidental) and Zamboanga.

The projected shortage for Metro Manila was 150 to 1,050 MLD from 2006 (the current year!) to 2012, with 300 to 400 MLD immediately needed by 2007 (next year already!).

It is said that strategic water sourcing could trigger another global war. Locally, the fight for that coveted MWSS bulk water project may just be the next scandal after the anomalous bidding for the 600-megawatt power plant in Masinloc, Zambales — if not done properly.

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CHARGES FILED: Masinloc still stinks, but at least the Ombudsman has found “enough basis” to give due course to graft complaints filed against board members of the Power Sector Assets and Liabilities Management Corp. (PSALM) that oversaw the bidding.

Respondents include Cabinet members on the PSALM board, among them Finance Secretary Margarito Teves, Energy Secretary Raphael Lotilla, Budget Secretary Rolando Andaya, Economic Planning Secretary Romulo Neri, Justice Secretary Raul Gonzalez and Trade and Industry Secretary Peter Favila.

Also accused were Nieves Osorio, PSALM president, and Froilan Tampinco, PSALM vice president for asset management and electricity trading.

In a July 12 order, the Ombudsman told the respondents to file their counter-affidavits and controverting evidence within 10 days of their receipt of the order. If they do not, their failure would be deemed as a waiver of their preliminary right to respond.

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JCPC MOVES: The complaint said that they had given YNN Pacific Consortium, the winning bidder for Masinloc, undue concessions that were disadvantageous to the government.

Among major violations cited was the repeated extension of the deadline for YNN to deliver the $227-million down payment for the plant, representing 40 percent of its $561.7-million bid.

The deadline had been extended three times, but YNN – whose incorporation was rushed only four months before the bidding — has not been able to pay.

While YNN obviously had connections, it did not have the technical track record and the capacity to pay. (Then why was it prequalified and allowed to bid in the first place?)

In a parallel move, the powerful Joint Congressional Power Commission has started looking into the Masinloc deal to pinpoint liability and work out remedies.

The commission may want to include in its review the Energy Regulatory Commission that appears also to have given YNN and its Malaysian backer Ranhill Berhad the post-bidding option to fatten the deal with a long-term power supply contract with the Manila Electric Co. (Meralco).

It might as well also include Meralco, which has had past dealings with YNN head Sunny Sun, who has another firm operating a floating power barge that supplies electricity to the power distribution firm.

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STAGGERING NEEDS: It is good to know that incoming Education Secretary Jesli A. Lapus intends to focus on the financials of the basic education system. Many of the problems plaguing education revolve around money, mostly the lack of it.

Of the P112-billion budget of the Department of Education — which is 12.4 percent of the national budget — more than 80 percent has been earmarked for salaries and wages. In terms of personnel, it is the biggest department.

DepEd annual requirements are staggering: 10,517 new teachers, 1.5 million more desks, 41,197 additional classrooms and 41.32 million textbooks. Every school year, more than a million youths enter elementary school. Handling classes are some 505,000 teachers.

Lapus says there is a budget gap of about P7 billion this year alone. “We have a lot of catching up to do, to reduce this budget gap to zero,” he said.

Citing statistics from neighboring countries, he said that with the exception of Indonesia, the percentage of the Philippine education outlays to total national budget is minuscule compared to Japan, Singapore, Malaysia and Thailand.

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ADOPT-A-SCHOOL: Unfazed, Lapus proposes to mobilize all available resources from both private and public sectors.

One vehicle he sees is the Adopt-a-School Program of 1998, under RA 8525 authored by House Deputy Majority Leader Eduardo Gullas and then youth Rep. Anna Marie Periquet.

(Btw, Gullas bats for the “instantaneous confirmation” of Lapus as education secretary. He said the department “desperately needs a dependable chief executive who can quickly turn the agency around.”)

The program under RA 8525 encourages private entities to help public schools, especially those in the 20 poorest provinces, in exchange for tax privileges.

Such private sector support can be directed at faculty development, the construction and upgrading of facilities, the provision of textbooks and other teaching materials, and the modernization of instructional technologies.

Another source could be the Special Education Fund now handled by local school boards. Lapus plans to sit down with local officials to review the operations and finances of the school boards.

Lapus may also look into the possible use of part of remittances of overseas Filipinos that totaled at least $12 billion last year.

If he needs legislation, his having come from the legislature would be a big help. In fact, that detail seems to be facilitating his confirmation by the Commission on Appointments.

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(First published in the Philippine STAR of July 25, 2006)

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