RP owes Austria P504 M for failed DOH project, groups claim

A failed project of the Department of Health (DOH) has cost the Philippines P504 million in “toxic debt” to the Austrian government, according to what cause-oriented groups call a citizen’s audit on the government’s debt.

In a press conference yesterday, the Ecological Waste Coalition, Greenpeace Southeast Asia, Global Alliance for Incinerator Alternatives (GAIA), and Freedom from Debt Coalition (FDC) revealed the half-a-billion “white elephant” involving the importation of 26 medical waste incinerators for government-run hospitals across the country which, they said, became useless following the implementation of the Clean Air Act of 1999.

The groups called on the government to repudiate the loan, at the same time as they asked Austria to cancel it, saying it unjustly burdens taxpayers.

“This incinerator loan is a classic example of an illegitimate debt that was incurred to finance an ill-conceived development project that posed danger to our environment and the people,” FDC secretary general Milo Tanchuling said.

Ronnel Lim of EcoWaste said the loan was contracted between Bank Austria and the Department of Finance (DOF) in 1997 that would have to be paid by the Philippine government until 2014 in 24 equal semi-annual payments. The loan has an interest rate of four percent annually.

Lim said payments on the loan’s principal started in 2002 and now represents a $2 million per year debt burden for the Philippines until 2014.

Lim noted that the waste disposal component of the project cost P241.70 million in 1996. The incinerators, which amounted to P133.209 million in 1996 and with a capacity between 300 to 500 kilograms of waste per day, were delivered and installed in 26 DOH-controlled hospitals between 1997 and 1998.

But in an earlier report of Greenpeace, it was found out that the incinerators were substandard and did not meet the emission levels guaranteed by the supplier, Austrian firm Vamed Engineering.

The incinerators were subsequently retired in 2003 when the incineration ban promulgated by the Clean Air Act took effect.

Lim also said an assessment of the incinerators’ emissions jointly conducted by the DOH and World Health Organization (WHO) revealed “extremely high emissions” that are harmful to the environment and to public health.

Von Hernandez, campaigns director for Greenpeace, said the DOH-WHO assessment was never publicly released by the government.

Hernandez that the incinerators were granted an exemption by the Environment Impact Assessment (EIA) process by the Department of Environment and Natural Resources even though it was of poor quality.

Meanwhile, the Global Call to Action Against Poverty (GCAP) claimed that the government allocates only a small proportion of the official development assistance (ODA) and foreign aid for health, education and housing.

“Its already a minuscule share of 11 percent of the Philippines’ ODA in 1986 to 2000, and it fell further to seven percent in the 2001 to 2006 period,” GCAP said.

“In contrast, the economic growth-oriented sector of infrastructure development increased its share dramatically from 50 to 67 percent,” it added. – With Helen Flores