Kaliwa dam project flagged, COA wants it reviewed for irregularities

The Commission on Audit (COA) wants a review of the China-funded Kaliwa Dam project due to lack of proof that its implementation will not harm the environment.

The Metropolitan Waterworks and Sewerage System (MWSS) is the government agency in charge of the dam project, while the Kaliwa Dam is part of the New Centennial Water Source program that promises to deliver 600 million liters of water per day to Metro Manila.

COA is mandated to audit the government's financial transactions.

Last week, COA called out the MWSS for proceeding with the implementation of the P12.2-billion Kaliwa Dam project in Infanta, Quezon without proof of compliance with environmental prerequisites and submission of necessary permits.

In its 2020 annual audit report, the COA noted the MWSS entered into a contract agremeent and issued a notice to China Energy Engineering Corp. Ltd. to proceed with the project on Nov. 13, 2019.

The COA noted that based on the MWSS’ 2020 report on projects, programs and activities, the detailed engineering and design phase of the dam project was 92.67 percent complete at the end of the year.

The audit body said this was despite the MWSS’ failure to show proof that the preconditions set by the Department of Environment and Natural Resources (DENR) under an environmental compliance certificate issued on Oct. 11, 2019 have been complied with.

In 2019, the government secured a US$283.2 million loan deal from China to build the Kaliwa Dam, a flagship project of President Rodrigo Duterte’s “Build, Build, Build” infrastructure program. 

China Energy Engineering Corporation Limited, a Chinese contractor, was selected to build the dam. Its participation in the project has been criticized as a violation of Philippine procurement laws and the Constitution that mandates a preference for Filipino contractors and workers who are equally if not more than qualified.

A BRI primer released by the Chinese Embassy  in the Philippines said China's participation in the project reflects the Chinese government's commitment to support Duterte's infrastructure program through the Belt and Road Initiative (BRI).

But China's investments have attracted suspicion from many sectors because of its military buildup in the West Philippine Sea (South China Sea). China-funded projects like the Kaliwa Dam are tagged for potentially undermining the country's sovereignty. The COA report has revived controversies surrounding the dam project.

The dam was widely opposed as it would displace an estimated 1,465 families of the Dumagat-Remontado indigenous peoples (IPs) in Rizal and Quezon.

When the contract documents about the dam were released in 2019, civil society groups warned they contained provisions that favor China. 

A provision states that Chinese laws will be used to resolve potential disputes that may arise regarding the dam project. A former legislator also criticized that a Chinese contractor was hired for the project. 

Numerous Catholic bishops in the Philipines issued a statement expressing concern that the project will mainly benefit Chinese investors instead of the common good.

Joan Jaime of the Kalipunan ng mga Katutubong Mamamayan ng Pilipinas said in a media interview that the dam will destroy the way of life of indigenous peoples whose ancestral domain was designated as the site of the dam project. 

"All things are given a monetary value and profited from. This is contrary to the needs of the people, the needs of the indigenous communities, and the idea that land should be used for the common good,” Jaime said. 

President Rodrigo Duterte acknowledged the right of IPs to protest although he said he is ready to use the “extraordinary powers” of his office to complete the project.

Environment group Haribon offered an alternative instead of building the controversial dam.

"The restoration and conservation of forests in existing watersheds like Angat and La Mesa is not only more cost-effective but will ensure continued water supply for Metro Manila and nearby provinces for years to come,” Haribon said. 

The group also urged the government to rehabilitate existing water reservoirs and strengthen the implementation of efficient water distribution systems and facilities.

The government has defended the Kaliwa Dam by describing it as the solution to Metro Manila’s looming water crisis. MWSS insisted that the dam’s environmental impact is only minimal. 

The China Embassy said the project “is one of the great achievements in helping the Philippines with more livelihood projects through China-Philippines mutually beneficial infrastructure cooperation within the framework of the Belt and Road Initiative and the Build, Build, Build plan.”

In the spirit of mutual trust and cooperation, China and the Philippines agreed that the project would be funded by  preferential loans from the Export-Import Bank of China.

In a separate interview, Chinese Ambassador Huang Xilian said the BRI project in the Philippines has become a key “cargo lifeline” and “bond of solidarity” during the pandemic.

Despite the controversies, the dam project continues and is expected to be completed in 2023.