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Bohol Irrigation scandal: A test case...
« on: June 24, 2007, 02:41:24 PM »

The controversial P 3.6-billion NIA-proposed BHIP-2, which houses the Bayongan Dam (considered to be potentially the country's third largest dam), could be a "test case" for the other on-going irrigation projects.

This is the opinion of NEDA Director and Project Monitoring Manager Roderick Planta who disclosed that three other similar projects (with over-runs) in Ilocos, Central Luzon and Cebu, have been stalled pending resolution of controversies over financial cost over-runs.

The Bohol Irri Project had first approval under the Japanese bank JBIC back in 1999 with an original approved budget of P 2.4-B before the other huge IRRI projects.

Socio-Economic Planning secretary NEDA Head and ICC (Investment Commission) Co-Chairman Romulo Neri had stopped fund releases for the BHIP-2 (Irrigation Project) due to "excessive" (cost per hectare computation based on 2007 adjusted NIA proposed figures) and "illegal" (project continuance despite non-approval of reappraisal and cost over-runs) in violation of law under the ODA (Overseas Development Act).

Although the Government Corporate Counsel reportedly opined that NIA could "go ahead with the project", NEDA is not taking chances with the recent ruling of the Court that the NAIA (airport terminal) declaring the contract with PIATCO being "null and void" when it was ruled as "disadvantageous to the government".

The judgment of NEDA-ICC is that the over P 600,000 cost per hectare of BHIP-2 was no longer of "economic sense" for the government interest.


Clearly, the BHIP-2 Irrigation Project will be beneficial to the farmers in the 5,300 hectares (covering three towns) and perhaps even transform the province into a Rice Granary.

The NAIA Project would have similarly buttressed the business and tourism agenda of the country but the Court rescinded the Contract nonetheless. The Government counsels had ruled the BHIP-2 Project is governed, allegedly unlike PITACO, by the Loan Agreement between the borrower and the international financial institution.

But even granting that, the virtual ignoring by NIA and the contractors of the approval /disapproval of ICC (a body all ODA funders had designated in the Philippines as an "oversight" for their development projects) could seriously jeopardize future funding arrangements from low-interest, long term bi-lateral or multi-lateral lenders to the country.

Likewise, the cost-over-run proposal of NIA of P 1.2-B , could not have come at a worst time today when the entire Economic Team is on the carpet for exceeding the fiscal deficit target of P 31-B to P42-B. The BIR Chief had just been given his walking papers for failure to meet collections.

The P 1.2-B over-run would therefore exacerbate the fiscal deficit, according to sources at the Department of Finance. The JBIC Loan would be payable over 20 years.

Regardless if the over-runs will be funded by the Philippine government or additional JBIC loan, it will be the Filipino tax payers who will still pay for the cost since the revenues of the NIA cannot totally support even the loan amortization.


The BHIP-2 Project Manager Modesto Membreve brought Bohol media to view the BHIP-Project last week and declared that Bayongan Dam is 100% complete and the canals 80% complete. Obviously, they were completed by the contractor Hanjin Industries of Korea. But that does not estop the Government to reimburse the latter since the over-runs were not pre-approved by the ICC. Without the ICC imprimatur and NEDA endorsement, funding cannot be provided by the DBM (department of Budget and Management).

This could possibly turn out into an ugly "collection case" of the contractor against the Government which is bad since the Korean contractor has numerous contracts all over the country.

The news story published (not the Chronicle) stating that the NEDA gave go signal to the project could mislead since the first letter request for NEDA for approval of new over-runs was dated December 2004 according to Planta. That is more than a full year after NEDA's so-called endorsement.


The Department of Agriculture (headed by Arthur Yap) which is the umbrella department of the NIA, is careful in treading over controversial grounds. In recent front pages has been the controversial jail term in the United States of Philippine DOA undersecretary Jocjoc Bolante who could not account for P 700-M in Fertilizer Funds distributed before the May 2004 presidential elections.

It is believed that Bolante who had immigration problems could not be given political "asylum for alleged harassment in RP" because of the active communication between the Senate Committee on Agriculture Jun Magsaysay and the US authorities alleging that Bolante was facing investigation by the Senate for the Fertilizer Scam, believed to have been part of PGMA's political war chest in 2004.

Many GMA allies were in that list of Fertilizer Fund recipients including a surprised Teddy Boy Locsin of Makati who was perplexed as to where he will use the fertilizer in an asphalt jungle like Makati where he is a congressman.

Just between the Bohol and Cebu Irrigation projects stand over P 2-B in reported over-runs, not counting those in Ilocos and Central Luzon.

Such huge controversial over-runs could certainly again invite the attention of
The Senate Committee on Agriculture and the Blue Ribbon Committee which is expected to be chaired by opposition stalwart senator Panfilo Lacson. The "small controversy" on the Talibon Dam already found its way into the Philippine Daily Inquirer and GMA 7 "Imbestigador". Certainly, this "bigger" multi-billion issue can explode in national media as well and invite the prying noses of the Philippine Center for Investigative Journalism.


President GMA , in her pursuit of her last three years of "legacy gifts" to the nation had appealed to media for cooperation. It will be the president's finest moment if she can leave behind all development projects worthy to be tagged as her "legacy with honor".

The stand-off on the funding of the BHIP-2 project is caused by "legal" and "economic" reasons per NEDA. The "legal" side will perhaps be enlightened by the "opinion" of the Secretary of Justice, which however, does not preclude the issue from reaching the courts of law.

The economic issue of whether the over-runs are "excessive", unfortunately, does not rest on the opinion of media, the provincial agriculturist, the BHIP Project Manager, the Governor or even PGMA. It is the ICC in coordination with NEDA (out of respect of the project funders JBIC) who will determine that.

We do not pretend to be DBM experts, but perhaps if the proposed NIA BHIP-2 proposal is trimmed, out of "fat" and "oil", it may yet have the nod of ICC/NEDA.

Then instead of a "white elephant" that will haunt our conscience through the ages, we will have a running irrigation project to enrich the farmers and prosper Bohol.

What kind of Boholano would not want that to happen?(The Bohol Chronicle, June 24, 2007)

Romans 10:9
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Bohol Irrigation Dam May Be Shut Down?

Started by Ligalig-Mike on Talk of the Town

2 Replies
Last post August 06, 2007, 02:01:52 PM
by Ligalig-Mike

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