MWSS can't negotiate Laiban dam terms: ADB
abs-cbnNEWS.com | 08/03/2009 8:10 PM
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MANILA - State-owned water agency does not have the capacity to negotiate the financial terms of the controversial P53-billion Laiban dam project with the private sector, the Asian Development Bank (ADB) said.
In a 26-page completion report for the Metropolitan Waterworks and Sewerage System (MWSS) New Water Source Development Project, the multilateral lender stressed that the agency needs more financial skills to "evaluate the possibility of partnerships with the private sector."
"The MWSS finance department does not have the capacity to conduct financial due diligence and negotiate the financing terms of projects of this type with private entities," ADB said.
ADB came with the July 2009 report even as the MWSS began negotiating the terms of the Laiban dam project with San Miguel Bulk Water Co. Inc., a unit of diversified conglomerate San Miguel Corp.
In October 2003, ADB approved $3.26-million technical assistance loan for the MWSS new Water Source Development project. This includes feasibility studies on the Wawa River and the Angat Water Utilization and Aqueduct Improvement projects, as well as resettlement plan preparations, reviews of design and tender documents, and arrangements for financing for the Laiban dam project.
The MWSS, however, considered options such as joint ventures and build-operate-transfer schemes even as the ADB expressed interest to help fund the project. This, the ADB said, has resulted to a partial cancellation of loan proceeds amounting to $1.875 million.
"In January 2007, at the request of MWSS, the Laiban Dam project preparation component was removed from the scope of the technical assistance loan, since MWSS had sought financing for the component from other sources," ADB said.
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