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press release from the Office of the Governor

  THE Bohol Irrigation Project Stage 2 (BHIP 2) is not overpriced, and
Socio-Economic Planning Sec. Romulo Neri as early as August 2003 said President
Gloria Macapagal-Arroyo had ordered to proceed with its implementation.

  Engr. Modesto Membreve, BHIP 2 project manager Friday gave these explanations
during the weekly program The Governor Reports aired live over all local radio
stations dyRD, dyZD and dyTR and slated for replay tomorrow over Cable TV Channel
6.

  Gov. Erico Aumentado let Membreve explain the facts over the program to dispel
apparent misinformation spread by project detractors and after Neri allegedly
balked in releasing more funds to complete BHIP 2.

  Equipped with an armload of documents for the program broadcasting from the
Governor’s Mansion, Membreve who had briefed Aumentado on developments the night
before said then National Irrigation Administration (NIA) Administrator Jesus
Emmanuel Paras had sought revision or update of the project cost and
implementation schedule.

  He pointed out Paras’ letter to Neri dated Dec. 28, 2004 where Paras said it has
become necessary to revise and update the project cost estimate to P3,629,876,000
of which P2,749,763,000 is a loan from the Japan Bank for International
Cooperation (JBIC) and P880,113,000 is the Government of the Philippines (GOP)
counterpart – and the implementation schedule to Dec. 31, 2007.

  Paras identified “high cost/increased prices as a result of currency adjustment
due to foreign exchange and in order to jibe with the present requirements and
status of the project” as his bases for the request.

  He requested the Investment Coordination Committee (ICC) of the National Economic
and Development Authority (NEDA) to approve the revision of the project cost from
P2,384,416,000 or an increase of 52 percent, and the extension of the
implementation of the project from Dec. 31, 2005.

  Considering that the project loan closing date is March 28, 2008, the proposed
extension of the project implementation schedule is still within the loan
disbursement period, Paras said.

  Meanwhile, only last May 17, Neri wrote Agriculture Sec. Arthur Yap that during
the ICC’s meeting on May 9, the committee was to request the Department of Justice
to render legal opinion on the consequences of proceeding with contract award
without first obtaining ICC approval of the project cost overrun per Official
Development Assistance (ODA) Act.

  All this while, NIA OIC-Administrator Marcelino Tugaoen Jr. already did his
homework. On May 4, he already sought the legal opinion of Justice Alberto Agra,
government corporate counsel on the BHIP contracts.

  This after he received a letter from NEDA Deputy Director-General Augusto Santos
dated April 15 that the contracts were null and void.

  Tugaoen said BHIP 2 is a foreign-assisted project financed by JBIC, covered by a
Loan Agreement signed on Dec. 28, 1999.

  On Dec. 11, 2002, NIA conducted the bidding for the construction of the Bayongan
Dam and appurtenances where the Hanjin-Kurimoto Joint Venture submitted the lowest
evaluated bid. On March 25, 2003, NIA held another bidding for the construction of
irrigation canals and appurtenant facilities, again won by Hanjin. In both
bidding, Hanjin’s bids were already above the Approved Budget for the Contract
(ABC), but still the NIA Bids and Awards Committee (BAC) had recommended to the
NIA Board the approval of the award of the contracts to Hanjin.

  JBIC concurred with the resolutions, hence the contracts were drawn and executed.
But then Santos wrote that letter thereby confusing Tugaoen, prompting him to seek
Agra’s legal opinion.

  Meanwhile, Aumentado wrote Neri to support Tugaoen’s request for extension and
approval of the cost overrun. He appealed to NEDA and the Cabinet ICC to give due
course to the NIA request.

  As NIA had addressed NEDA’s and the Cabinet ICC’s concerns, he transmitted to Neri
a certification under oath of Provincial Agriculturist Liza Quirog that he
approved, and notarized by Provincial Legal Officer Handel Lagunay, to reaffirm
BHIP 2’s viability as a project.

  Quirog’s certification stated that palay production increased by 95 percent after
two years because of the consistent supply of water from the irrigation projects
and the adoption of hybridization that is projected to increase production further
by 50 percent after three years, as well as diversification of crops. Corn
production similarly increased.

  The provincial government is determined to harness the full potential of the
targeted 10,200 hectares of service area of BHIP 1 and 2 for rice and corn
hybridization and high value crops diversification, the certification read.

  Besides, the irrigation projects also double as tourist attractions. The periphery
of the Bayongan Dam is now planted to African tulips, fire trees and other
flowering trees. Landing berths for floating restaurants and paddleboats and
waiting sheds have been constructed in strategic areas. More seedlings are readied
for planting at Bayongan and Malinao Dam as part of the value engineering and
agri-tourism development.

  Aumentado’s commitment to fully harness the 10,260 hectares aims to ensure that
Bohol will become the food basket of Central Visayas as envisioned by NEDA and
President Arroyo. (June Blanco)

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