San Miguel to partner with 2 Japanese groups for Laiban dam

MANILA, Philippines - The water subsidiary of San Miguel Corp. (SMC) seeking to build what is touted to be Metro Manila’s future water source will be partnering with two Japanese groups to construct the multi-billion project. One group will be in charge of the Laiban Dam’s technical aspects while another will handle the project’s financial requirements, Ramon S. Ang, San Miguel president and chief operating officer, said at the sidelines of the San Miguel Brewery Inc. annual stockholders’ meeting on Tuesday. “We have Japanese partners, but the sharing [and the partnership structure] is not yet finalized," Ang said. San Miguel Bulk Water Co. Inc. has submitted an unsolicited bid offer to the Metropolitan Waterworks and Sewerage System (MWSS) for the construction of the project. Ang said the project would cost at least $1 billion. The executive also allayed concerns regarding the project, which is covered by a draft agreement between SMBWCI and the MWSS. Any provision in the agreement it will have with the regulator will still be a subject of lengthy discussions, he said. Earlier, the National Economic and Development Authority (NEDA) has questioned the “take or pay" provision contained in the contract, which will reportedly require consumers and/or government to pay for unused water. It still is “premature" to say that water will be expensive because the contract “will still be negotiated," Ang said. “They cannot immediately prejudge that it will be disadvantageous. No such thing. It will still take a long time," he said. “The MWSS will first have to determine whether our offer is acceptable and then we will still have to talk." He also dismissed allegations that the draft agreement is a secret deal. “What secret? It’s a secret in the sense that we cannot give our financial and technical studies," said Ang. Ang stressed the project’s importance, pointing out that Metro Manila could not rely on Angat Dam as its sole water source especially with its growing population. “Everybody’s been saying that Laiban Dam is not financially viable since the 1970s. But now we went ahead to study it [and we are able to submit our proposal]," Ang added. Under its proposal filed in February, SMBWCI would construct the Laiban Dam in Tanay, Rizal through a joint venture with the MWSS. SMBWCI’s proposal is in line with San Miguel's strategy to invest in strategic industries such as power, oil and gas, and water. The company has been very aggressive in venturing out of its core food and beverage business. Besides acquiring 27 percent of Manila Electric Co. for P30 billion, it has also agreed to purchase majority stake in Petron Corp., the Philippines' largest oil refiner, for P32.2 billion. It is also planning to enter the telecommunications industry through a venture with Qatar Telecom. - Cheryl M. Arcibal, GMANews.TV