Too many cooks spoil Carmen water project

A couple of weeks ago, we wrote about the highly controversial Carmen Bulk Water Project, the only water project being developed in the whole of Cebu province today. As we’ve said, this project was initiated way back in 1996 and at that time, it was only the Central Equity Ventures doing the initial study to develop the Luyang River in Carmen. Later, the Ayala Corp., with its experience in the Manila Water Company, became part of the consortium.

However, I don’t know why this water project, despite its utmost importance, had a very long gestation period, just like the visioning and the eventual construction of the Fernan Bridge, which took 10 years. In 2000, the consortium became known as the Ayala Stateland Consortium and it gave an "unsolicited" proposal to the MCWD to develop the Luyang River as its principal source of water. I recall that we endorsed this project in the Regional Development Council (RDC-7) way back then.

In the old days, Cebu City’s water needs were supplied by the 90-year-old Buhisan Dam operated then by the Osmeña Waterworks System (OWS) and it has since been taken over by the Metropolitan Cebu Water District (MCWD). Thanks to Cebu’s unprecedented economic growth, only 39 percent of Cebu City households are served by MCWD. The rest of the population gets their water from private wells, which is actually cheaper, but this adds to the worsening saltwater intrusion within Cebu City’s aquifer, which is now closer to the provincial Capitol.

To add to our water woes, many private well owners also sell water at P150 per cubic meters to the very people who the MCWD should have served but failed to do. Hence the problem really is not only finding new and clean water sources but affordable water. To compound our problems further, many MCWD pumps or wells near the Banawa and Guadalupe areas have been discovered to be contaminated. That’s because of the uncontrolled construction of homes near these wells… hence these pumps had to be shut down.

Back to the Carmen Bulk Water Project. It was only in 2004 when the National Economic Development Authority (NEDA) approved this project on its first pass. Like I’ve said, I don’t know why this project was taking too long to get approved. Meanwhile, the Ayala Stateland Consortium went on with its hydrological studies of the Luyang River to check its viability.

But now that this issue is on everyone’s ears, thanks to lack of transparency on the part of MCWD, it was learned that if in case the Ayala Stateland Consortium lost to another bidder, the winning bidder would refund the consortium some P200 million. We already wrote about this a couple of weeks ago and many found this Ayala Stateland-MCWD agreement unpalatable. But then, this was because only the Ayala Consortium was doing these studies.

Enter the new players which want to outbid the Ayala Consortium from their unsolicited proposal. They are namely, Malaysian utilities giant Ranhill Berhad, Cagayan de Oro City-based Rio Verde Water Corp. owned by Jose Ch. Alvarez and a consortium of Cebuano businessmen Michel Lhuillhier, Antonio Tompar and Norberto Quisumbing Jr. which intend to challenge the Ayala Consortium. Wait a minute! Michel Lhuillhier is a jeweler and Norberto Quisumbing Jr. sells surplus "chop-chop" Suzuki mini-cabs…. what kind of bidders are we getting for Cebu’s water? What of Pepito Alvarez… no one even knows what he’s doing in Cagayan de Oro?

The difference here is that none of these challengers are spending their own money for their own hydrological studies and they are the most vehement objectors to the MCWD’s agreement with the Ayala Consortium for reimbursement of its development cost. They want to outbid the Ayala Consortium and get a "free ride" on the development cost without paying?

With more delays, suddenly the MCWD took in a consultant under the International Finance Corp. (IFC) to redraft its contract, which was finalized last May. A week ago, the IFC gave a presentation to the Cebu City Council where a "conflict of interest" issue surfaced (adding to more controversy) when it was learned that an investment arm of the IFC had invested P750 million in Manila Water to acquire eight percent equity or ownership. Then IFC loaned Manila Water a total of $60 million or P3 billion in 2003-2004. You figure it out if there is conflict of interest in this deal!

As of last Friday, the latest news about this controversy is that the IFC has assured Mayor Tomas Osmeña that it would not invest in the Carmen Bulk Water Project… then in a meeting with NEDA in Manila, the MCWD agreed not to require the winning challengers to refund the Ayala Consortium for its project development cost now estimated at P150 million. But IFC, an affiliate of World Bank, is to be reimbursed $800,000 for its consultancy work. Of course, Mayor Tomas Osmeña found this figure very "atrocious." But that is how the world works today; Third World countries are milked by World Bank huge amounts for consultancy. Take a look at any foreign-funded project and you will find this figure quite common.

So where does this put the Ayala Consortium? Holding the empty bag! Remember the old saying, "Too many cooks spoil the broth." Well, this is exactly what’s happening with the Carmen Bulk Water Project today, except that the cooks here are greedier! Why did this project take too long to cook reminds me of lyrics of the song MacArthur’s Park, which goes, "Someone left the cake out in the rain, I don’t think that I can take it cause it took so long to bake it and I’ll never see the recipe again… oh no."

At this point, let me just say that the Carmen Bulk Water Project is too controversial to implement… I would strongly suggest or recommend that the Ayala Stateland Consortium bail out of this project and let’s see if Mr. Lhuillhier, Mr. Quisumbing or Mr. Alvarez would still pursue this without spending their own money for its hydrological and development cost. I say that it’s time for them to put their money where their mouth is!

As for the MCWD, it should learn not to use highly expensive consultants… after all, with its years in this business, surely it could develop local talent. Perhaps the light at the end of the tunnel is the proposal by the province of Cebu to enact a law or ordinance creating the Provincial Water Authority which is now on second reading. If the mayors of Cebu want water, Cebu Gov. Gwen Garcia already offered them money for their own municipal water supply districts, which is already happening on Bantayan Island. As for the Carmen Bulk Water Project, it can still be something if only the businessmen behind it would think more of serving the water needs of the Cebuanos rather than how much they could profit from them!

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For e-mail responses to this article, write to [email protected]. Bobit Avila’s columns in The Freeman can also be accessed through The Philippine STAR website (www.philstar.com). He also hosts a weekly talkshow, "Straight from the Sky," shown every Monday, 8 p.m., only in Metro Cebu on Channel 15 of SkyCable. Bobit’s columns can also be accessed at www.shootinginsidecebu.blogspot.com.