Aug 082013

Some weeks ago, I wrote in this column that while the practice of making us pay for the income tax bill of the water concessionaires seems inappropriate, it is not the water issue we should get too excited about. That can be easily fixed. The more important concern for me is reliability of supply.

We are over dependent on just one source for the water needs of 10 million of us Metro Manilans. Gerry Esquivel, the administrator of MWSS, told me we depend on Angat Dam for  a chilling 97 percent.

As I wrote in this column, one bad earthquake (Angat is close enough to the Marikina fault) that damages the dam and we will all go thirsty. The rivers that flow through Metro Manila are just too murky to be even considered as alternative sources. A limited amount of water  from Laguna de Bay already undergoes the expensive process of reverse osmosis. I doubt we can tap more of that in an emergency.

Gerry told me some months ago that he had plans to strengthen portions of the dam that need reinforcement. Gerry also had plans to increase the water storage capacity of the dam somewhat. But everything is apparently at a standstill because the power generating facilities at the dam was privatized.

It worries me that our government is not doing enough to bring new sources of raw water into the system to reduce our dependence on Angat. Worse, it sold the power side of Angat and this has serious implications on the amount of water there we can truly depend on.

It was actually simply idiotic for government to privatize the old Napocor power generating facilities in Angat. I know the Epira law mandates that, but there should have been more thought given to the idea before it was carried out. The bid was eventually won by a Korean government-owned company. The Supreme Court also declared the sale was proper but with certain reservations on water rights, when NGOs questioned the sale to a foreign group.

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The sale shouldn’t have happened in the first place. Angat Dam is a special case simply because it supplies 97 percent of Metro Manila’s water needs. Power generation there is more an incidental activity. The primary reason for the dam is water supply. MWSS should always have control over the release of Angat water, not the power guys.

So what happens now? Of course the Koreans want control over the release of water. They only make money if they produce electricity. They don’t care if there is not enough water in the dam to quench our collective thirst. They can always go back to Korea if the dam dries out.

Luckily, the privatization deal has not been carried out yet. The Korean company wants to bring down the $440.88 million price tag on the facility, citing its deterioration. It also cited several changes the Philippine government has introduced in the agreements that both signed for the privatization deal.

Korea Water Resources Corp. (K-Water) asked PSALM, our government’s power privatization agency, to grant them water rights so it can “achieve the same level of benefits expected” in its 2010 bid for the power plant. K-Water is also questioning the exclusion of the Angat dam’s auxiliary units four and five from the assets it will take over.

The hydroelectric plant is composed of four main and five auxiliary turbines. Units four and five are owned by MWSS which has called for bids to rehabilitate the generating facilities on a rehabilitate-operate-maintain (ROM) arrangement via public-private partnership (PPP) scheme.

K-Water claims this MWSS plan undermines K-Water’s economic benefits because it would not be entitled to electricity sales. K-Water  noted the deterioration of the Angat hydroelectric plant due to Psalm’s failure to operate and maintain the facility.

K-Water is also contesting exclusion from the technical working group for the Angat Water Protocol. This body has the power to set up the Reservoir Operation Rules as well as procedures to manage the release of water from the Angat dam. All these objections from the Koreans constitute what is to them, unacceptable material change to the agreement.

Perhaps the administration should use these Korean complaints as the opportunity to walk away. I get the impression that the Koreans are also looking for an exit option from this deal. If the Koreans do not think the deal is good for them, the deal is even worse for us, Metro Manilans.

Angat should be preserved and earmarked primarily for our water needs. If there is electricity to be produced by its hydroelectric power plant, that’s not as important as our water needs. PSALM was wrong to have offered this facility for privatization in the first place. If they force this through and things go wrong with our water supply, our lives, all 10 million or so of us, will be in jeopardy.

This brings up the question of whether government has a system to more seriously discuss life and death policy issues like this before implementation. PSALM cannot just point to EPIRA and say they are mandated to privatize Angat.

The fact the MWSS has control over much of the water releases in Angat, and rightly so, should have alerted PSALM that this is not an ordinary privatization deal where the main consideration is to raise funds. If the Koreans have given any down payments or deposits as is normally required of such auctions, government should return the money and walk away.

I don’t think walking out of the deal will discourage other foreign investors for future government asset sales. We made a mistake and it is more important to rectify it immediately than to consummate a bad deal.

The Koreans will only be after a return on their investment and understandably so. Giving Angat to them is too horrible an option for government officials to even think of doing. It shouldn’t even be sold to a Filipino company without clear and iron-clad guarantees on Angat’s primary purpose to supply water to Metro Manila.

Next time, the bean counters in PSALM and DOF must look at the bigger picture… and not just the dollars and cents of things.

On line petition

I got this e-mail from Dinna Dayao. I think it is a good suggestion that will hopefully give cabinet members a greater sense of urgency.

Hello, Boo!

I’ve started the petition “President Benigno Aquino III: Require ALL public officials to take public transit once a month” and need your help to get it off the ground.

Will you take 30 seconds to sign it right now? Here’s the link:

Here’s why it’s important:

80 percent of Metro Manila residents — including children, the elderly, and persons with disabilities — take public transportation.

Yet the dismal state of public transit doesn’t allow them mobility with safety and civility. They suffer long lines, squeeze into jampacked trains and rickety buses and jeeps, and endure long travel times.

The government puts all its efforts in trying to solve traffic, but not in solving public transportation.

We keep building roads and flyovers that only encourage more people to drive their cars. But we don’t invest in facilities that make it easier for transit riders to get from point A to point B. These facilities include comfortable bus, jeep, and train stops, wide sidewalks, and well-designed walkways that connect the different modes of transport.

The only way government officials will understand the plight of commuters is if they themselves take public transit regularly.

DOTC joke

No, it isn’t really a joke. I just called it such because you will want to laugh so that you won’t end up crying.

A meeting was called at the Palace where representatives from various departments like DOTC and DPWH among others were called. The meeting was to coordinate preparation efforts for our hosting of the Asian edition of the World Economic Forum next year and the APEC Summit meeting in 2015. We have to be more impressive than last year’s WEF host: Myanmar.

They started discussing airports. The DOTC representative was asked about their plans to rehabilitate major airports to give a good impression of our country. So, the DOTC representative talked about their plans. Good so far as plans go.

Crucial question: where is your timeline? Can you deliver on time? No answer.

Then, someone quipped, maybe DOTC is expecting President Obama to arrive in Manila by parachute.

And that’s today’s joke.

Funny, hindi ba?

Boo Chanco’s e-mail address is Follow him on Twitter @boochanco

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