San Miguel eyes Laiban bulk water project

ABS-CBN News

Posted at Feb 09 2009 05:30 PM | Updated as of Feb 10 2009 01:53 AM

Food and drinks giant San Miguel Corp. wants to partner with the government in the development of the P48-billion Laiban Dam project.

In a statement to the Philippine Stock Exchange, San Miguel said its wholly-owned subsidiary, San Miguel Bulk Water Co. Inc. (SMBWCI), has submitted an unsolicited proposal to the Metropolitan Waterworks and Sewerage System (MWSS) for the said project.

SMBWCI and its foreign partner would enter into a cooprative joint venture with MWSS to secure financing and undertake the engineering and design, construction, operation and maintenance of Laiban Dam. Plans include the construction of the dam and headworks, raw water conveyance facilities, water treatment plant, hydropower plant, treated water conveyance facilities, pumping stations, storage facilities and offtake points, the parent firm added.

In a text message, San Miguel vice chair and president Ramon Ang said the project was very attractive because it would assure "water security and supply in Mega Manila for the next 50 years."

According to analysts, this was in line with San Miguel's direction to invest in strategic industries.

"This project would really cement San Miguel's plan to transform into a diversified entity. This is just rounding up its exposure in the utility sector. Water is a good business because it gives guaranteed rates and assures a certain degree of profitability in the long run, which is beneficial to the shareholders," said one brokerage analyst.

Aside from San Miguel, east zone water concessionaire Manila Water Co. has signified interest in bidding for the Laiban Dam project.

Located in Tanay, Rizal, the project is intended to address the long-tem water requirements of Meto Manila by constructing a dam utilizing the Kaliwa River Basin in the province. The dam will provide an average yield of 21 cubic meters per second or 1,830 million liters per day of water supply.

The Laiban Dam Project was deferred in 1989 in lieu of equally important water supply projects, the Angat Water Supply Optimization Project and the Umiray-Angat Transbasin Project. However, Presidential Memorandum Order No. 10 dated August 1998 was issued by then President Estrada, mandating MWSS to immediately resume the implementation of the Laiban Dam project.

Laiban Dam is estimated to serve a population of about 5.50 million or equivalent to 690,000 households in the areas of Rizal province and southern Metro Manila. Target construction is scheduled next year with completion expected in five years.