Written By BINGO P. DEJARESCO III
Editor
The Bohol ChronicleMANILA. The controversial BHIP-2 with a huge P1.2 billion cost over-run as proposed by the National Irrigation Authority (NIA) got large national attention when media awardee Cheche Lazaro's "Probe" of the leading ABS-CBN devoted almost its entire episode last Wednesday to dig deeper into the issue.
The BHIP-2 which houses Bayongan Dam (considered potentially the third largest dam) has been hit by high-pressure issues. The dam has broken – pun intended.
ABS-CBN's "Probe" decried the growing list of humongous "white elephant" projects in the country including the Bataan Nuclear Plant, the Expo Pavillion in Pampanga, the North Railway System and possibly some of the present mega irrigation dams including BHIP-2.
NEDA (National Economic Development Authority), the country's premier economic planning manager, through the collegial (ICC) Investment Coordinating Council had stopped funding the BHIP-2's P1.2 billion which it termed "excessive" and "Illegal."
NEDA Director and Project Coordinator Erick Planta (calling from Thailand) told the Chronicle that quite apart from the "foreign exchange differential" (which NIA persistently used as a justification) which is an extraneous, uncontrollable factor – there are items in the over-run that cannot be justified.
Former NEDA Director Romulo Neri told the "Probe" team that the cost estimate increase from P 300,000 to P 600,000 per hectare is economically unjustifiable. "It is like they were authorized to buy a Toyota car and bought a BMW car instead", the former AIM (Asian Institute of Management) professor decried.
The BHIP-2 Project initiated by Governor Rico Aumentado since 1998 when he was still Bohol's 2nd District representative, is now on its 9th year with nary a hectare of soil irrigated. Aumentado stated that the economic internal rate of return of the project is 16% - a low yield per NIA according to "Probe" – but they went ahead with the project anyway.
The project was named "illegal" by NEDA because NIA and the contractor continued with the project (with the dam almost 100% complete, not the canals) even without the sanction of the NEDA-ICC. Without this, the DBM (Department of Budget and Management) will not release funds for any ODA (Overseas Development) Project which has anointed ICC as its "oversight" vehicle.
With this development, the contractor Hanjin Industries has collectible from the government to the tune of P 700-Million which DBM will not honor without ICC-NEDA go-signal.
The NIA had allegedly gotten a positive note from the Office of the Government Corporate Counsel (OGCC) allowing the over-runs based on the terms of the term loan agreement with JBIC (Japanese bank funder). However, NEDA is awaiting the opinion of the Department of Justice on the same.
Neri told "Probe" that NEDA-ICC will hold on to its original stand on the BHIP-2, regardless. This was seconded by Planta who said that ICC is a collegial body and its "economic evaluation" cannot be unbundled by legal or political considerations. He clarified that the position of NEDA will have to stay regardless of who heads the agency since NEDA is only one part of the ICC and its head a mere co-chair.
NATIONAL AND INTERNATIONAL IMPLICATIONSAccording to "Probe", there are presently 21 projects costing P106 billion which have cost over-runs of P36 billion originated by six different government agencies. According to NEDA Director Planta, somehow the liberality accorded to cost-over-run applications especially in ODA-funded projects has been subjected to abuse through the years.
NEDA's stern position on the BHIP-2 is an "acid test" since this is the first assertive stance to rationalize the infrastructure funding in the country.
Four dams in the country reportedly need P 3.6-Billion in cost over-run funding to "save" the projects. To be affected by the BHIP-2 stand-off (due to 52% over-run) will be the Ilocos Sur (former Governor Singson's province) irrigation project with a 92% cost over-run and the Nueva Ecija Irrigation Project with a P1.6 billion over-run. The latter was to target 100,000 hectares of land for irrigation, stretching to nearby Bulacan and Pampanga (GMA's home province), according to "Probe."
The Philippines has been considered a laggard in terms of infrastructure and its quality has not been helped by allegations of graft that had imperiled the projects. Last year, the country was tagged the "Most Corrupt Nation in Asia" by an international rating group, eclipsing erstwhile "leader" Indonesia.
This has led to wastage of public funds and compromised public service, according to "Probe" who correctly concluded that even if funding is readily available from foreign sources – at the end of the day it will be Juan de la Cruz who will have to foot the bill.
Currently the country seems back to its fiscal woes by overshooting its deficit. That means that since the country's revenue collections are down, the treasury cannot afford any unplanned expenditures engendered by unprogrammed "over-runs."
Most ODA funders have eyeballed the BHIP-2 Project as this will test the effectiveness of its economic watchdog "ICC" in ensuring the projects that they fund are in order.
QUESTIONABLE ECONOMIC VIABILITYNeri disclosed that the BHIP-2 contract may be considered "void" because the terms departed from the originally approved one. "Probe" disclosed that the P 1.2-Billion over-run can possibly construct another small dam. BHIP-2 Project Manager Modesto Membreve said that NEDA cannot evaluate properly "what is going on in the field" during the construction.
Proposals submitted to NEDA, however, often have the imprimatur of foreign Project Consultants often appointed by the funding bodies.
Membreve lamented that NIA had to stop the BHIP-2 Operations last June since there was no funding for the P1-million monthly salaries of the personnel. If the operations stop and the canals unfinished, it is even more than likely that even with a "completed dam" and rain waters till November, there may be no irrigation for the so-called 3,500 farmer beneficiaries in three towns and 5,300 hectares of rice land envisioned by the BHIP-2.
Former Bohol NIA Head and contractor Nilo Sarigumba told "Probe," there was already something "fishy" at the onset of the Project. He claimed that three members of the BAC (Bids and Awards Committee) in Central Office (Manila) did not sign the Hanjin contract of P1.486 billion which was 27% higher than the approved agency ceiling of P1.1 billion. This was earlier exposed by Philippine Daily Inquirer columnist Juan Mercado in Letter to the Editor of the Chronicle last month.
Pressed against the wall, Membreve lamely told "Probe" that the original purpose of the dam was to serve as a means of counter insurgency – a reasoning that escaped local media in the series of interviews with NIA Bohol. A socio-political reason this time.
Sarigumba also noted that NIA can be charged with "technical malversation" of funds since it allotted two mid-range vehicles for the use of Governor Aumentado and 2nd District representative Roberto Cajes so they can "supervise" the project every week. NIA cannot do that because the project was already awarded to Hanjin, the contractor.
Governor Aumentado quickly informed "Probe" host Cheche Lazaro in a taped televised phone interview heard in "Probe" that he had currently ordered the "return" of his service vehicle since the BHIP-2 is now "completed."
DEBILITATING TECHNICAL HANDICAPSIt appears, however, that the greater problem of BHIP-2 could be technical. It remains to be seen that after hundreds of millions spent, will the Bayongan Dam live up to its billing?
Today at 39 meters water level, it's short of the target 42 to even start watering the first 500 hectares. BHIP-2 will have to wait for the next rainy months till November to confirm its total viability – but that may even be suspect.
Because by Membreve's own admission BHIP-2 is "largely" dependent on the nearby Malinao Dam which has its own problems to start with. It is only able, at its peak, irrigate only over 3,000 hectares of its 5,000 targeted coverage or a mere 65%. Experts earlier opined the Malinao Dam can store only 17 days worth of water. How then can a water excess be therefore channeled to Bayongan? Mang Artemio, a farmer who wearily waits for the merciful rains to come, queried.
Almost like an after-thought, the Bohol NIA head rationalized there are three other "creeks" to supply the water Bayongan Dam but apparently they are too small to make a dent. Will BHIP-2 ever work? Why not rehabilitate Malinao and reforestrate the area?
SHAPE OF THINGS TO COMEThe messy BHIP-2 Project appears to be starting to just assume a national face.
There are serious watchers curious whether the lateral "kicking" of the outspoken Neri from NEDA to be "Education Czar" (whatever that means and why Educational Secretary Jesli Lapuz scratches his head) had something to do with his reformist economic standards. Whether political considerations will use legal avenues to justify what our top economic manager had already consigned as not economically viable - while the maverick Neri is out solving the CHED problems.
Granting without admitting that the P1.2 billion is approved and released to the contractor (now that the BHIP-2 is "completed") – what will that do to add to the technical feasibility of the dam to serve its targeted constituents -3,000 Boholano farmers?
The farmers have often been used as a justification against the "few objectors" of the BHIP-2 Project. Actually, if the BHIP-2 turns out to be a "white elephant" – it is the rest of the 87 million Filipinos who will have to pay for the JBIC loan - through the years - and even the 3,000 farmers left hanging dry - a woeful silhouette in this unfolding drama of national survival.
"Probe" had done an excellent and fair documentary on an issue the Chronicle had doggedly pursued in the interest of truth and justice.
Boholanos had not heard the first of BHIP-2 through "Probe" – and it certainly will not be the last.
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