DAVAO CITY, Philippines -- Hedcor Inc., a subsidiary of the Aboitiz Group, said it has submitted a compromise proposal to the Davao City Water District (DCWD) over the use of the disputed Tamugan River in Baguio district here.

Rene Ronquillo, Hedcor president, said under the proposal, the company will build only one hydropower plant there.

Under the original plan, Hedcor's 27.5-megawatt Tamugan Hydropower Project consisted of two cascading run-of-river hydropower generating facilities. The upstream 7.5 MW Panigan plant would tap the Panigan River and the downstream 20 MW Tamugan Plant was to harness the Tamugan River.

"The plan of trimming down the project came about in a last-ditch effort to arrive at a win-win solution with DCWD," Ronquillo told reporters here earlier this week.

DCWD has been opposing Hedcor's project in Tamugan, saying it will eventually dry up the river and would affect the city's water supply.

"We will reduce from two plants to only one plant and move to an elevation higher than the original plan. That way, they (DCWD) will get all the water they need," Ronquillo said.

He said the plan would also reduce the project's capacity to 18 MW but it will make the cost cheaper.

"The cost of the proposed two hydropower plants is pegged at P6 billion. However the new scheme, if implemented would lessen the cost to around P5.2 billion," Ronquillo said.

He said Hedcor was expecting to finish the redesign in six months.

"Hedcor came up with the plan of redesigning the project to co-exist with DCWD in Tamugan River," Ronquillo said.