Tuesday, October 24, 2006 MCWD meets with Ayala Corp., Manila Water, IFC consultants
INSTEAD of allowing Ayala Corp. to collect a P150-million project development cost, MCWD is considering buying some of the consortium’s studies and government permits, if these are reasonably priced.
Metropolitan Cebu Water District (MCWD) officials discussed the option yesterday during a meeting with their consultant, the International Finance Corp. (IFC), and the Ayala-led consortium but nothing is definite yet, MCWD Board Chairman Juan Sual Montecillo said.
The possibility of buying project assets was raised to resolve the issue on the project development cost refund, which is stalling the bidding for the P2-billion water project.
“We maintained there’s no reimbursement of the project development cost but we discussed another option, which is to buy their project assets. The board will still evaluate if the price is reasonable, but if we find it to exorbitant, we will reject it,” he told Sun.Star Cebu.
The project assets will include feasibility studies, environmental impact assessment studies and technical studies related to the proposed Carmen Bulk Water Supply Project.
It will also include the environmental compliance certificate issued to Ayala Corp. and its partners Stateland Equity Ventures and Viscal Corp.
In a phone interview after the meeting last night, MCWD General Manager Armando Paredes said they will still assess whether the studies will be valuable and useful to the water district.
The consortium was asked to submit a detailed breakdown of all the expenses they incurred in all their studies on the Luyang-Cantumog River in Carmen town in northern Cebu, the proposed source of water supply for the project.
“The board wants the proponent to identify the specific costs because what they previously submitted was very broad. We also asked that the price be reasonable so they can be reevaluated. The Board is considering purchase of assets but only if they are useful and are reasonably priced,” Paredes said.
When asked if there are other options being considered, he said “the purchase of project assets is the most likely that is worthwhile looking into as far as project development cost is concerned.”
Sun.Star Cebu tried to interview representatives of the consortium but they declined to disclose the details of the meeting.
Paredes said, though, that the consortium has expressed their willingness to re-submit the documents on the expenses they have incurred.
Ayala proposed to collect from the winning challenger a sum of P156-million as reimbursement for their project development cost if they decide not to match the lowest price in the Swiss challenge.
Officials from the City and Cebu Province, local water suppliers and other sectors opposed the refund, saying it will result in high cost of water.
Aside from the issue on the project development cost, the three parties also discussed in yesterday’s meeting the revisions the National Economic and Development Authority’s (Neda) Investments Coordination Committee (ICC) made in the contract for the project.
Paredes said the consortium objected to the removal of the proviso that will have MCWD in default if they fail to pay for the water that will be supplied.
In the event that MCWD is cited in default, the contract required MCWD to buy out the consortium.
But the Neda ICC removed from the contract the said provision in order to protect the interest of the water district. (LCR)
