AN INDUSTRY official has dismissed reports that the rejection by the Metropolitan Cebu Water District (MCWD) of the proposed P2-billion Carmen Bulk Water Supply Project will dampen investors’ interest in Cebu.
“The biggest advantage of rejecting the offer is that suddenly, we are awakened to the fact that there are other water sources,” said Joel Mari Yu, managing director of the Cebu Investments Promotions Center, the marketing arm of the South Road Properties (SRP).
While Yu acknowledged that Metro Cebu’s water supply problem is a major concern of investors, the rejection of the Carmen Bulk Water Supply Project does not mean the City has “lost hope” in resolving the issue.
Yu was reacting to a report published by the Manila Bulletin last Tuesday that Japanese Ambassador Ruichiro Yamazaki asked the Philippine government to reconsider the decision to reject the Carmen Bulk Water Supply Project, which is proposed by the consortium that includes Ayala-led Manila Water and Stateland Equity Ventures.
Meeting demand
Yamazaki told Finance Secretary Margarito Teves and Socio Economic Planning Secretary Romulo Neri in a letter that the Japanese Government “believes that the realization of the project is a step towards meeting the water demand of the cities and municipalities in Metro Cebu.”
The feasibility study of the project, which was supposed to be implemented under the build-operate-transfer (BOT) scheme, was conducted in 2004 and 2005 by the Mitsubishi Corp. and Manila Water Corp. through a fund from Japan’s Ministry of Economy, Trade and Industry.
While expressing appreciation for Yamazaki’s concern over Cebu City’s water shortage problem, the Philippine Water Resources Inc. (PWRI), a group that is proposing other water supply projects to MCWD, has drafted a letter assuring the Japanese Government that Cebu’s public and private sectors are looking into other means to resolve the issue.
“To pacify His Excellency, the answer to the water crisis in Metro Cebu can be answered not by the supply of water from Carmen, Cebu alone, which was proposed by Ayala at the cost of P25.55 per cubic meter (cu. m.),” the PWRI statement read.
It also said there are other sources of water that are “just as nature friendly and would not adversely affect the aquifer in Metro Cebu area at a considerable cheaper cost to the ultimate consumers.”
PWRI has submitted to MCWD an unsolicited proposal under the BOT scheme to supply a total of 50,000 cu. m. a day of potable water that will be sourced from rivers within the territorial jurisdiction of Cebu City.
Reimbursement
The price of water as proposed by PWRI will range from P18 per cu. m. to P20 per cu. m. from a desalination system at SRP.
Unlike proponents of the Carmen Water Supply Project, PWRI said it will not be seeking reimbursements for project development costs should a challenger submit a lower price during a bidding.
“We want to emphasize that the other sources of water are nearer to Cebu City and at the same time cheaper than the Carmen Bulk Water Supply Project,” PWRI legal counsel Romulo Senining said in a press interview last Wednesday at the City Sports Club Cebu.
Yu also echoed Cebu City Mayor Tomas Osmeña’s earlier statement that the Carmen water project is overpriced.
In their unsolicited proposal to MCWD, the consortium of Ayala Corp., Stateland and Viscal Corp., proposed to supply about 46,000 cu. m. of potable water a day at P25.55 per cu. m. under a 40-year BOT arrangement.
In his letter to Teves and Neri, Yamazaki said the feasibility study on the Carmen Bulk Water Supply Project had pointed out that if there is no development of new water sources, Metro Cebu might not achieve its full potential.
MCWD has rejected the Carmen Bulk Water Supply Project for the proponents’ failure to submit a notice of acceptance within a specified period of time.
The BOT Law requires the project proponent to submit a letter of acceptance of the approved terms and conditions within 45 calendar days from receipt of the notice of approval.
The Manila Bulletin reported that the consortium has contested several provisions of the approved contract as recommended by the National Economic and Development Authority’s Investment Coordinating Council-Technical Working Group that caused the consortium’s failure to submit the requirements on time. (MMM)
