POSTSCRIPT / July 26, 2009 / Sunday


Philippine STAR Columnist

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Check Laiban ‘pabaon’ among SONA projects

HULING HIRIT: One thing we would be watching for in the State of the Nation Address tomorrow of President Gloria Arroyo is the Laiban dam project among the major infrastructure she has lined up in the remaining 10 months of her term.

Will she insist on the questioned deal that well-connected players are forcing through in the last two minutes of the game?

Considering the bullheadedness of its sponsors, the $2-billion project that dwarfs all other big-time but tainted projects of the administration appears like a “pabaon” (sendoff gift) to the exiting regime – one last “hirit” before the close of business on June 30, 2010.

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GUARANTEE: Aside from owning and operating the system designed to supply water from the proposed Laiban dam, the “private sector participant” in the project will get state guarantee in the form of take-or-pay assurances.

This deal sweetener is contained in the two-page document known as the “TERMS SHEET OF THE BULK WATER SALES AGREEMENT” also simply known as The Agreement.

This is an attachment marked Annex “C” of the proposed joint venture agreement between the Metropolitan Waterworks and Sewerage System and the San Miguel Bulk Water Co. Inc.

The document shows there is indeed a take-or-pay provision despite the denials of MWSS and San Miguel Bulk that there is no government guarantee in the contract to be submitted to the MWSS board for approval.

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CAN’T THEY WAIT?: he main obligation of San Miguel under the document is to build and operate the dam and then supply 1,950 million liters per day of water during the 25-year life of the contract.

The MWSS counterpart obligation is to accept and pay for that contracted volume whether the water is used or not.

This take or pay provision is similar to the sure-payment guarantee written by the Ramos administration into the contracts of Independent Power Producers (IPPs) that has bloated the cost of electricity.

The cruel fact is that while consumers drown in water rates that could triple during the contract period, the Arroyo administration that approved such exactions would no longer be around to take the rap.

Since there is no water crisis foreseen during the next 10 months, why does not MWSS wait for the new president taking over in July next year? Why force the juice out in the dying days of the present regime?

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HUSH & RUSH: The Laiban dam system, a government project of long standing, was declared a priority item by the National Economic and Development Authority in 2007. This does not mean, however, that it should be rushed even in violation of law.

Lawyers we have consulted said being an ongoing project, it cannot be the subject of an unsolicited proposal. Under the Build-Operate-Transfer law, they added, the project must undergo public bidding – a requirement that MWSS has ignored.

The indecent haste, not to mention the secrecy shrouding the negotiation, has fueled suspicion that the terms exacted by the favored proponent are disadvantageous to the government and the consuming public. The contract text should be published.

The hush-hush and the rush-rush make it impossible for other interested parties to study the project and put together a viable counteroffer within the cramped window given potential challengers.

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MWSS DILEMMA: With the take-or-pay provision, rates are expected to go up three times the present retail cost of household water. The government might be unable to do anything about it since MWSS will seal its agreement to the onerous terms.

The two concessionaire-distributors — Manila Water and Maynilad — were not consulted in the fixing of the rates. Yet the two firms stand to bear the brunt of complaints over exorbitant rates.

They will find themselves in the same predicament as the Manila Electric Co. which collects but does not retain passed-on charges of the power generators and the transmission firm that are included in Meralco bills.

The dilemma is that MWSS, being a partner in the Laiban joint venture, is also the supposed regulator. How will MWSS regulate itself?

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ALERT CODES: Methinks the military and the police sometimes talk too much, to the point of jeopardizing sensitive security preparations.

Why do the security services have to announce they are on a full or heightened or red (or some other adjective) alert just because there is fear of unruly street marches or of a big bang being primed by terrorists?

The coding is of no use to the general public except to panic them. But then maybe that is the idea, because when sufficiently frightened, people tend to become more dependent on the military and the police.

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KEEP FOE GUESSING: For tomorrow’s SONA, for instance, we have been plied with reports of troop and police deployment, and of augmentation forces from provincial commands.

Why should the enemy be told how many soldiers and policemen are being deployed and where? A smart commander is supposed to keep the enemy guessing.

The only logical, if naughty, conclusion one can make of the announcements is that the alleged deployment is not true, that it is calculated to mislead or make the enemy think twice before making trouble.

Defense Secretary Gilbert Teodoro and National Police Chief Jesus Versoza might want to order the men to stop talking about troop strength and movement.

But, as I said, sometimes some dubious announcements — with the connivance of the media — are calculated precisely to mislead the enemy.

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(First published in the Philippine STAR of July 26, 2009)

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