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MWSS says legal, financial issues addressed in Kaliwa Dam bidding

The Metropolitan Waterworks and Sewerage System (MWSS) on Tuesday defended the bidding process for the New Centennial Water Source-Kaliwa Dam Project, saying it has strictly complied with relevant laws and guidelines.

“MWSS wishes to assure interested parties that all legal, financial, environmental, and technical issues have been addressed in strict compliance with Philippine laws, rules and regulations, as well as the guidelines for Official Development Assistance (ODA) projects,” the industry regulator said.

The P12.2-billion Kaliwa Dam project was awarded to China Energy Engineering Corporation Limited in December 2018.

A  Commission on Audit report has questioned the bidding results that seemed to be “in the guise of being a competitive procurement process” as two out of the three Chinese contractors that made a bid for the project were not even able to comply with the qualification requirements—which seemed intentional.

Despite having been confirmed by the Technical Working Group that the nominated contractors had “proven track record and work experience,” the Consortium of Guangdong Foreign Construction was found ineligible when the bids were opened.

Also, the financial bid of Power Construction Corporation of China Limited was “surprisingly higher” by 6.91% than the approved budget for the contract.

State auditors also questioned why winning bidder China Energy started its preliminary project activities despite the absence of a Notice to Proceed from the government. Some documents required were still missing and must be submitted by the company.

“The COA Audit Observation Memorandum (AOM) issued by the COA on 16 June 2019 on the Kaliwa Dam Project called for an explanation of the criteria for competitiveness on the vetting of the three nominated Chinese contractors, with a reminder that the winning contractor, China Energy should comply with contract agreements before the conduct of preliminary project activities,” MWSS said.

“In response to the AOM, MWSS Management has already submitted the detailed explanation of its Technical Working Group to the COA Auditor,” it noted.

COA’s observation that the loan remains ineffective as documents required under the agreement have not yet be submitted is no longer valid, according to the MWSS.

The following documents have already been submitted:

  • Monetary Board approval of the loan between MWSS and Export-Import Bank of China
  • DOF approval-in-principle and willingness to guarantee
  • DOF certification that all internal government approval required to deliver and execute the loan agreement
  • Bureau of the Treasury certification that complies with Section 3 of Republic Act No. 4860 or “An Act Authorizing the President of the Philippines to obtain such Foreign Loans and Credit”
  • Special Authority from the President
  • Signed Preferential Buyer’s Credit Loan Agreement
  • Signed letter of guarantee

“Clearly, the government approvals to the loan agreement were secured in full coordination with all concerned government agencies to implement this government flagship project which is part of the MWSS’s Water Security Program,” the regulator said.

“The only remaining pre-condition to the loan effectiveness that has yet to be submitted is the Environmental Compliance Certificate (ECC),” it said.

The Environment Impact Statement Report is going through a second stage screening by the Department of Environment and Natural Resources-Environmental Management Bureau (DENR-EMB), according to the MWSS.

“Public hearings have also been scheduled jointly by MWSS and DENR-EMB on August 23, 27, and 28 in the provinces of Quezon and Rizal,” it said.

“Although the proceedings take time, the MWSS is committed to comply with all the requirements for ECC issuances in order to ensure that the environmental and indigenous people’s group will be heard and that all concerns regarding the project will be addressed,” it added.

The P12.2-billion Kaliwa Dam project was expected to help meet the growing demand for water in the National Capital Region.

Militant groups have been opposing the project, citing risks of displacing indigenous people and submerging their ancestral lands.

“The New Centennial-Kaliwa Dam project has been planned since 1967 as a major source of water for Metro Manila. More than five decades has passed and it is only the administration of President Duterte that has taken bold and decisive action to ensure the swift implementation of this long overdue project,” the MWSS said.

“The project will benefit the millions of residents in Metro Manila who have been reeling from water shortages year in and year out,” it said. —VDS, GMA News