APD | Philippine Official Development Assistance to benefit consumers

By APD writer Melo M. Acuña

MANILA, Mar. 27 (APD) – Department of Finance Assistant Secretary Antonio Joselito Lambino II said the use of highly concessional Official Development Assistance (ODA) financing to build the New Centennial Water Source-Kaliwa Dam project stand to benefit Filipino consumers with cheaper project and financing costs instead of utilizing the Public-Private Partnership route.

In a statement, Asst. Secretary Lambino said the PPP would entail additional charges passed on to water consumers whoever the private component will be to recover its investments.

Lambino said even if going through the PPP route to construct the Kaliwa Dam would be “at no cost to the government,” it does not mean “no cost to consumers.”

“The higher the project and financing costs of a solicited PPP would have been borne by users, eventually,” Lambino said in a press briefing.  He added there’s no such thing as free water.

He recalled that in January 2014, the then-Investment Coordination Committee (ICC) restructured the project components of the Kaliwa Daw and changed the mode of financing from ODA to PPP with an estimated project cost of P18.7 billion.  The amount was reduced to P12.25 billion when the National Economic and Development Authority (NEDA)-ICC approved the recommendations of the Metropolitan Waterworks and Sewerage System (MWSS) to revise the project’s funding component.  The approval was confirmed by the NEDA Board chaired by President Rodrigo Duterte.

An ICC document from 2014 stated that under a PPP mode for the Kaliwa Dam project, “amortization payments will be financed through the imposition of a Water Security Charge as a separate line item in the water bill of consumers,” Lambino explained.

Lambino said when the Duterte administration took over and opted to undertake the project through ODA, the project cost went down from P18.7 billion under a PPP scheme to P12.2 billion.  Considering the fees and interest payments in completing the project through ODA, the cost would still be lower at P14.5 billion compared to the estimated price tag of P18.7 billion under a PPP scheme, he added.

Asst. Secretary Lambino said with the ODA, faster implementation is assured and granted the Philippine government to finance the project at lower rates than the private sector.

Regarding the unsolicited proposal of the Japan-based Global Utility Development Corporation, Lambino said that it only involved the construction of the Kaliwa intake weir, “which is just a portion of the whole project.”

“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,” Lambino said.  

(AISA PACIFIC DAILY)