Metro Manila water woes: Years of policy logjam lead to dry taps

EVERY DROP COUNTS Volunteer firefighters distribute water from a fire hydrant to households at Barangay Itaas in Mandaluyong City at the height of the crisis. —LYN RILLON

(Conclusion)

In 1979, the administration of dictator Ferdinand Marcos began planning for the construction of Laiban Dam in Tanay, Rizal province. That’s because planners were already worried about Metro Manila’s dependence on the 1960s-era Angat Dam for 95 percent of its drinking water.

After the 1986 Edsa People Power Revolution, the administration of President Corazon Aquino shelved plans for the new dam due to the huge cost of the undertaking.

But in 2009 — a full decade before the biggest water crisis hit the metropolis this month — San Miguel Corp. proposed to revive the project, with the conglomerate’s head, Ramon Ang, offering to shoulder its $1-billion construction cost in exchange for a 30-year contract to operate a hydroelectric power plant as part of the dam.

Laiban Dam was the largest of the three proposed alternative water sources for Metro Manila’s booming population, the other two being the mid-sized Kaliwa Dam, also in Tanay, and the smaller Wawa Dam in Rodriguez, also in Rizal. The facility would have added 1,900 million liters per day to the water needs of the metropolis.

No sooner had San Miguel submitted its unsolicited proposal for Laiban Dam to the government than critics from various sectors started denouncing it. The main criticism was the “take-or-pay” provision of the water supply deal that would have guaranteed payment to the conglomerate for the water it produced, even if it was not consumed.

Smaller projects pushed

Instead, Manila Water Co. Inc. and Maynilad Water Services Inc. — both owned by rival conglomerates — pushed for smaller water supply projects that could be “scaled up” later once higher demand for water became apparent.

“But is there any doubt that water needs would rise to the level of Laiban’s output soon, and even exceed it?” Ang said in defense of the project’s massive size. “A major water crisis will hit us in just a few years.”

His reasoning fell on deaf ears. Still smarting from the high cost of take-or-pay electricity generated in response to the power crisis of the 1990s, government policymakers, corporate rivals and consumer advocates piled criticism on the deal. Sensitive to public opinion, neither the succeeding administrations of Presidents Gloria Macapagal-Arroyo and Benigno Aquino III backed the proposal, resulting in the shelving of the project.

Packaged as PPP

Despite this setback, Aquino administration officials said they worked tirelessly to facilitate the building of new water supply sources for Metro Manila’s 12 million residents.

In an interview, two former officials of the Metropolitan Waterworks and Sewerage System (MWSS) under the Aquino administration, chair Ramon Alikpala and administrator Gerardo Esquivel, said Kaliwa Dam was packaged as a public-private partnership (PPP) in 2015 and was ready to be bid out the following year.

The PPP scheme was the signature economic program of the Aquino administration, which, though generally transparent and corruption-free, was widely panned by members of the local business community for its slow and cumbersome approval process.

They explained that the smaller Kaliwa Dam, located downstream of Laiban Dam, was deemed to be a more feasible alternative because it required the relocation of fewer illegal settlers compared to the estimated 4,500 residents who lived in the vicinity of Laiban.

“Unfortunately, the project got caught up in the change of administrations in 2016, and the new leadership decided to shift the funding to ODA,” Alikpala said, referring to official development assistance scheme in which the government funds an infrastructure project’s construction using cheap loans from other countries.

Thus, the new dam that could have been augmenting the metropolis’ water supply by 2021 will now likely be finished by 2025, Esquivel said.

With his background in the construction business, Esquivel is confident that the time needed to build the new dam can be shortened by a year if its builders use new technologies.

Stop-gap measures for now

But until then, Metro Manila will have no new major water supply coming on stream, except for small stop-gap measures like Manila Water’s new filtration plant that will extract potable water from Laguna Lake, a backup plan to drill deep wells around the metropolis, and reliance on water conservation schemes.

Both Esquivel and Alikpala laid the blame for the current crisis squarely on Manila Water for its “mismanagement” of water resources, particularly the company’s decision to deplete the La Mesa Dam reservoir despite early indications that supply was not being replenished as fast.

The Inquirer obtained a copy of the agreement signed between the MWSS and former Manila Water president Jose Rene Almendras, who later went on to serve in the Aquino Cabinet, when the Ayala-controlled company’s concession agreement was extended by 15 years in 2009.

Part of Almendras’ letter read: “Manila Water commits to increase its investment to pursue the government mandate to accelerate wastewater projects to comply with the Clean Water Act and the Supreme Court decision to clean up Manila Bay. The business plan also provides for debt service support to the implementation of new water sources projects like Laiban. Total investments (capital and expenditures) program increases from P1.87 billion for the 2008-2022 plan to P458 billion for the period 2008-2037.”

Sought for comment, Almendras said that “unfortunately, the next set of MWSS leadership decided they want[ed] to develop the new water source themselves.”

In particular, he pointed to Esquivel, who had different ideas on how to manage the country’s future water supply.

Differences of opinion

“If you ask around the water sector, you will hear our differences in opinion,” Almendras said of Esquivel’s policies.

Indeed, as is typical in a crisis of this scale, each stakeholder has a firm opinion of who is to blame. And neither one of them is willing to concede culpability in creating the current water shortage.

But whoever is ultimately at fault—whether it is the lack of political will of the national leadership, the weakness of industry regulators or poor business decisions of the private concessionaire—it is clear that the country lacks a unified national strategy for dealing with its growing water needs.

“We don’t even have a Department of Water,” Alikpala said, explaining that his current work as an advocate for water security involves bringing together all water stakeholders under a single coherent strategy.

Any long-term solution will also require the approval and support of Filipino consumers, most of whom are averse to paying fees for utilities.

“Remember that the cost of water is, on the average, only about 10 percent of one’s electricity bill,” Alikpala said. “Yet, we can survive without electricity, but not without water.”

Pending the implementation of these proposed long-term solutions, Filipinos will have to contend with remedial measures. And pray for rain.