Saturday, September 23, 2006
World Bank told: Drop water project
CEBU CITY -- Cebuano water suppliers asked World Bank consultants Friday to drop the Ayala-led Carmen Bulk Water Supply Project so Metro Cebu consumers can have cheap water, at less than P20 per cubic meter.
Local government officials and water suppliers said it is unfair that the winning challenger in a bidding for a water project will be asked to refund the project development cost under an unsolicited proposal.
But since they are acting only as advisers to the Metro Cebu Water District (MCWD) and the Build, Operate and Transfer Center (BOTC), the consultants said they are not in the position to decide on the issues raised against the P1.8-billion water project.
The issues should be addressed to the Investments Coordination Committee (ICC) of the National Economic and Development Authority (Neda) and not the World Bank, said Bernard Sheahan.
Sheahan, director of advisory services of the International Finance Corp. (IFC) of the World Bank Group, assured the Cebuanos, though, that they will see to it that there is transparency in the handling of the project.
Advice
He also clarified that there is still no fixed amount for the project development cost the winning challenger will have to refund Ayala Corp. and its partners Stateland Equity Ventures and Viscal Corp.
But it will definitely be less than P200 million, he added.
"We at the IFC are advisers to MCWD and the BOT Center, and it is not our concern whether the project development cost is paid or not. It is also not our concern who wins in the bidding. Our only concern is to provide the best advice we can give to MCWD, to enable its citizens to have better access to water," said Sheahan, who flew from Washington D.C. for the meeting.
Sheahan led the consultants invited by Osmeña to a lunch meeting yesterday, which was also attended by Governor Gwendolyn Garcia, Representative Raul del Mar (Cebu City, north), Vice Mayor Michael Rama, Capitol consultant Pablo John Garcia and local businessmen from the water sector.
Pablo John told the IFC consultants that the project development cost refund in an unsolicited proposal has no basis in the BOT Law, an observation previously confirmed by a senior World Bank official.
An intense discussion ensued during the dialog, with Cebu Bulk Water Consortium Inc. Chairman Jose Alvarez asking the consultants to cancel the unsolicited proposal and conduct an open bidding.
Done deal?
Alvarez alleged the water project is already "a done deal" that may be riddled with graft.
"Definitely, we will ask to stop this unsolicited proposal because we believe that you're insisting we should pay development cost, including the money that Ayala paid to Stateland. It's unfair. Now we will go to court to stop this... Why don't you just do a public bidding?" Alvarez said.
Instead of sourcing water from the Ayala-led consortium at P25.55 per cubic meter, Alvarez offered to sell water to MCWD at less than P20 per cubic meter, with a capital investment of P1 billion, or P800 million less than that of Ayala.
"We don't want a situation that is locally called `lutong Macau.' This issue is already causing turmoil at the local level... so we request you to advice MCWD not to insist on an unsolicited proposal because that's only a new label for a negotiated contract," Alvarez said.
He further said the World Bank should not allow a situation where MCWD would mangle the Carmen Bulk Water Supply Project and have the IFC "sanitize" it.
Judgment
But Sheahan said the IFC has been very careful in studying the proposal and saw to it that it complied with the BOT Law and the Water Code of the Philippines.
"We were hired for a reason. We were hired because we're good at this, to make very difficult judgments on very difficult issues, to help countries do things that are hard to do, like investments in basic services like water. Is it wrong? But we're not wrong very often and that's the reason people hire us, to give good advice and help get things done," he explained.
"For those who do not believe the project is taking the right direction, there are many recourses, to either stop the process or drop the project altogether. There are many avenues for this, but our view is that this process is being handled correctly in line with Philippine laws and right now it's for the Neda ICC to decide whether it is technically correct or not," Sheahan continued.
In an interview after the meeting at the Cebu Grand Convention Center, Osmeña said he was not satisfied by the statements of the IFC consultants.
"Of course not, I'm not satisfied. But it's not for me to be satisfied, it's for you to see for yourself because it looks like I was already reaching a point as if I have an agenda against Ayala and I'm trying to back up somebody here," the mayor told reporters.
As for the plans for a lawsuit to stop the project, Osmeña said he will have to read the documents first if it pushes through, but he believes Alvarez has a solid ground for it. (LCR/Sun.Star Cebu)
(September 23, 2006 issue)
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