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Thursday, November 05, 2009 | MANILA, PHILIPPINES
Corporate News
Firm offers ‘better alternative’ to San Miguel’s Laiban Dam
A PRIVATE firm is offering what it claims is a better alternative to San Miguel Corp.’s proposal to build the $1-billion Laiban Dam in Rizal.
Sierra Madre Water Corp. claims it can plug the expected gap in Metro Manila’s water supply by 2015 at the cost of only $225 million, and without raising the rates charged by the two concessionaires.
In a briefing yesterday, Sierra Madre Water officials said they are proposing to build a bulk water facility along the Sierra Madre mountain range which will harness water from 11 rivers and tributaries through dams and connecting tunnels.
The total capacity of the entire project will be 2,300 million liters per day (MLD).
The Laiban Dam’s projected capacity is 1,900 MLD. A 1,600 MLD shortfall is expected by 2015. The present supply is 4,000 MLD.
The San Miguel proposal, which the regulator Manila Waterworks and Sewerage System had estimated to cost about $1 billion, would be the biggest infrastructure project in the Philippines. Construction for the project is estimated to take at least five years.
The Laiban Dam project is being pursued by the food and beverage conglomerate under an aggressive plan to expand outside its core businesses.
Rolando M. Zosa, Sierra Madre Water president, said his firm had submitted a proposal to concessionaires Manila Water Corp. and Maynilad Water Services, Inc. to supply an initial 700 MLD over a 25-year period.
The company said it could deliver the first 350 MLD within 24 months from contract date, and the remaining balance 12 months after. The first phase of the project will cost about $170 million.
By contrast, the proposed Laiban Dam project will take five years before full operations.
“Most of the preliminary work with regards to environmental impact has been done, as well as the clearances from the communities. We know where the pipelines will pass,” Mr. Zosa said.
“So once we have advanced in the arrangements [with the concessionaires] then I think it could proceed very quickly because the work in terms of engineering is essentially done,” Mr. Zosa added.
The initial phase will include a 130-million-cubic-meter reservoir and two small diversion dams that will get water from five river systems in Laguna and Quezon. The project will also include an 11-15 megawatt hydroelectric facility.
Additional facilities will then be put up depending on demand.
“Apart from supplying new water, it is really located in a different geographic zone than the present supply, which is Angat River. So it provides the diversity and security of supply needed for Metro Manila,” Mr. Zosa said.
The bulk water facility will also immediately help alleviate the water supply shortfall in southern Metro Manila as its submarine pipeline will land directly in Muntinlupa.
The entire bulk water facility will also leave “very minimal environmental footprint” according to Mr. Zosa.
“Our dams are very small, very low dams. And the release of water is to the Pacific, so there is no issue with respect to flooding to communities around our area,” Mr. Zosa said.
“The design of the dam takes into account possible earthquake issues.
That’s why the design is extremely conservative. The topography is such that there are very few people involved,” Mr. Zosa added.
The company is now courting international lending institutions for project financing. First Metro Investment Corp. will be the principal financial arranger for the project.
Mr. Zosa added that under his proposal, no government guarantee is required.
There will also be no “take-or-pay” obligation.
Sierra Madre Water is 70% owned by Mr. Zosa, with the balance held by IDHI Ports and Shipping. -- Jose Bimbo F. Santos
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