Wednesday, 24 November 2010

"Perfected" Laguna de BAy project deserves respect

‘Perfected’ Laguna de Bay project deserves respect

Wednesday, 24 November 2010 00:00

Manila Times

As you may imagine—but ap-parently Malacañang has not, the announcement made by President Benigno S. Aquino 3rd canceling a Belgian-supported project to rehabilitate Laguna de Bay has upset not a few quarters.

For example, residents and local government officials of lakeshore towns had been looking forward to the implementation of the so-called Laguna Lake Rehabilitation Project (LLRP).

The heavy siltation of Laguna de Bay has greatly diminished its water-holding capacity. The towns around the lake and even Metro Manila face the dire prospect of massive flooding that can exact a heavy toll on lives and property, as shown by our experience with Typhoon Ondoy/Ketsana in September 2009.

The LLRP is contained in a contract worth P18.7 billion entered into by the Philippine government, through the Department of Environment and Natural Resources (DENR), and the Belgian company Baggerwerken Decloedt en Zoon (BDC).

There are indications that the President canceled the LLRP in pique during a recent meeting with Rodrigo Cabrera, head of the so-called Laguna Lake Development Authority (LLDA).

Cabrera had earlier told reporters that the rehab project was “still under review.” Mr. Aquino supposedly did not take too kindly to the LLDA chief’s remarks.

At the meeting last week, the President told Cabrera and other officials—in no uncertain terms—that he has canceled the contract.

Actually, Mr. Aquino had first raised questions about the lake rehab project in his State of the Nation Address. Subsequently, he told a group of newspaper editors the same thing.

Last Friday, Palace spokesman Edwin Lacierda confirmed that the President had indeed terminated the lake rehab project.

The administration has been telling everyone about the President’s decision to scrub the LLRP—except those who deserve to be told the bad news first.

Supporters of the LLRP told newsmen over the weekend that the Philippine government had yet—as of this writing—to give the project contractor, BDC, a formal notice of rescission of contract.

One of them said: “Given the scale of the project, the government should at least have given BDC the courtesy of informing it of the decision to unilaterally cancel the contract.”

Sources said that the Philippine government has not even given the Belgian contractor any update on the status of the project since the contract was signed in 2009. BDC was apparently the last to know about the termination of their contract with DENR.

Proponents of the LLRP continue to point out that the legality of the dredging project has been upheld by three heads of the Department of Justice (doj), including current DOJ Secretary Leila de Lima. They added that the contract has also gone through the entire process of approval—passing muster before the National Economic and Development Authority (NEDA) and the Department of Finance, aside from the DOJ.

The provincial government of Laguna has endorsed the project, as have nongovernmental and people’s organizations in the area because they realize the benefits that dredging the biggest body of freshwater in Luzon would bring.

“The government cannot say that the project is overpriced or graft-ridden because it has met all the legal requirements and no one has come forward with solid evidence that the contract is grossly disadvantageous to the government,” one of the LLRP’s backers emphasized.

Aside from the grave peril that the project’s cancelation exposes lakeshore and eastern Metro Manila communities, the President’s unilateral termination of the LLRP underscores the unstable business environment in the country.

“The business sector wants a predictable business setting where policies and rules and regulations are clearly laid out and implemented evenhandedly across all sectors,” explained one of the project’s supporters who requested anonymity for obvious reasons.

“However, an unpredictable business environment where contracts can be unilaterally cancelled by the government negates its efforts to attract more investments and create jobs that are crucial to reducing poverty in the country,” the source added.

The Aquino administration is trying to encourage so-called public-private partnerships, or PPPs, in its bid to accelerate the country’s economic growth. “But how can the private sector be enticed to put money in business ventures if they cannot be assured of adequate protection for their investments and the rules are selectively applied?” the source asked—rhetorically, of course.

The decision to cancel the LLRP also has international repercussions. “Foreign contractors and foreign investors would now think twice about doing any business with the Philippine government since they cannot expect a level playing field where their investments can be amply protected and valid contracts can be upheld and respected,” the source said.

This issue is also likely to become an irritant in Philippine-Belgian relations. Ambassador Christian Meerschman of Belgium was said to have expressed concern over the erratic business conditions in the Philippines, adding that his country will review existing bilateral ties, including trade and official development assistance (ODA), in view of the LLRP’s cancelation.

“It’s likely that the entire European Union would also take firm steps to protect their business interests in the Philippines in the wake of Mr. Aquino’s ill-advised move to cancel the Laguna de Bay dredging project,” one of the project’s supporters said.

Actually, it is not too late for the President to reconsider his decision to terminate the LLRP. However, he would need to seek the counsel of quarters other than those who have opposed the Laguna de Bay project and others like it from the very start.

Moreover, BDC reserves the right to seek legal remedies so that the project contract can be upheld.

“The Belgian contractor can even elevate the issue to the proper international body for arbitration, as in the case of NAIA 3,” one of the project’s boosters said, referring to the controversy-ridden construction of the third terminal of Ninoy Aquino International Airport.

“After all, the Laguna de Bay contract is a perfected contract, and should be respected by both sides,” the source stressed.

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