MANILA - State-run Metropolitan Waterworks and Sewerage System (MWSS) will run to Congress to increase its additional borrowing capacity to build the Laiban dam on its own, should San Miguel pull out of the deal.
"We have no other options but to consider doing it on our own through a government loan," Diosdado M. Allado, MWSS administrator, told reporters.
Mr. Allado said the borrowing capacity of MWSS was "already depleted to a little less than P5 billion, and the [Laiban dam] project is P65 billion."
Ramon S. Ang, San Miguel president, said last month said he was considering pulling out of the Laiban dam project following criticisms it would jack up water rates through a take-or-pay contract.
The deal was met with controversies because of regulators’ alleged failure to publicize the bidding, preventing other parties to submit their proposals and effectively giving away Laiban Dam to San Miguel.
San Miguel unit San Miguel Bulk Water Co. had submitted an unsolicited proposal to undertake the multi-billion dam construction. The proposal was left unchallenged by other investors.
Mr. Allado, however, said there was still no formal communication" from San Miguel of "either pushing through or withdrawing" from the project.
"Right now they are still in the proposal stage. We are still evaluating," Mr. Allado said.
The food and beverage conglomerate is pursuing infrastructure and heavy industries under an aggressive plan to branch outside its core business.
The proposed Laiban dam is expected to yield an additional 1.9 million liters a day, in line with the MWSS’ projected water shortfall in 2015.
MWSS said that the 4,000 million liter per day (MLD) capacity of the Angat dam would not meet the projected 2015 demand of 5,620 MLD.
In July, San Miguel said it had invited Japanese partners — Toyota Tsusho Corp. and Orix Corp. — to help build the Laiban dam in Rizal. Mr. Ang had said the two Japanese investors would handle the technical and financial requirements of the dam project.
Southeast Asia’s largest food and beverage conglomerate has been diversifying since 2007, buying a 27% stake in Manila Electric Co. last year. It is in the process of acquiring a majority stake in oil refiner Petron Corp. The company has a stake in Liberty Telecoms Holdings, Inc. and has incorporated Vega Telecom, Inc. for its telecommunication ventures.