The New Centennial Water Source-Kaliwa Dam Project (NCWS)

Dam site (upstream) - Photo from Department of Environment and Natural Resources, Republic of the Philippines

The New Centennial Water Source-Kaliwa Dam Project (NCWS)

This research reflects information available up until June 2021, it may not reflect developments after the date of assessment.

The New Centennial Water Source-Kaliwa Dam Project (NCWS-KDP) is a banner project under the Philippine government’s Build, Build, Build (BBB) program. The Kaliwa Dam project is central to the Philippines’ participation in China’s overseas “Belt and Road Initiative” (BRI) and part of the Duterte administration’s closer relationship with China. It aims to supply 600 million litres of water per day and benefit some 17.46 million people or about 3.49 million households of Metro Manila, Rizal, and Quezon by providing a redundant water source to reduce the current 97 percent dependence on the Angat Dam. The NCWS-KDP will be funded from a combination of a loan agreement under an official development assistance (ODA) loan from China (P12.2 billion) and funds from the Philippine government’s regular budget. According to official statements, 85 percent of the project cost, or about P12.2 billion, will be financed by the Export-Import Bank of China (EXIM) under the Preferential Buyer’s Credit Loan Agreement. The project contractor is China Energy Engineering Corporation (CEEC).

Project Background

NCWS-KDP has been on and off the government’s major infrastructure list since the 1970s. Its development stalled primarily because of environmental and socio-cultural issues relating to the planned construction. The project was first conceptualized under then-President Ferdinand Marcos but was overtaken by events with his departure in February 1986. However, the MWSS Board of Trustees decided to temporarily defer the Laiban Dam Project in December 1989 to accommodate equally important water supply projects which were determined to be urgent at that time.

Technical studies about the construction of a dam in Laiban continued under the administration of President Fidel Ramos starting in 1992. By 2007, the administration of President Gloria Macapagal-Arroyo had secured a loan from China to fund the project. However, a political scandal involving a Chinese firm marred the administration and caused the project to be shelved.

In 2009, San Miguel Corporation, a private company, submitted an unsolicited proposal for the construction of a massive Laiban Dam with a correspondingly large reservoir slated to flood some 28,000 hectares of forest. The proposal was eventually set aside with growing public concerns that the project would increase water rates and displace indigenous people; MWSS subsequently terminated the joint-venture talks for the project.

Some years later, the project was resuscitated as the New Centennial Water Source project (NCWS) with a proposal for two dams in the Kaliwa watershed: a main Laiban Dam and a regulating Kaliwa Low Dam. Concerns about the duration and construction costs led officials to consider building them in stages under different financial schemes. Choosing this option, NEDA approved the implementation of the Kaliwa Low Dam as the first stage in 2014.

The project was initially planned to be financed under a public-private partnership. Subsequently, Duterte pursued the bigger, China-funded NCWS-KDP focused on the single Kaliwa Dam, though MWSS has noted that the dam’s specifications allow for increased capacity designed to accommodate water from the construction of additional dams.

The Metropolitan Waterworks and Sewerage System (MWSS), a national government agency of the Philippines, is the project’s implementing agency. China EXIM Bank financed approximately 85 percent of the project costs under the Preferential Buyer’s Credit Loan Agreement on the NCWS-KDP. China Energy Engineering Corporation (CEEC) functions as the project’s contractor. Both CEXIM and CEEC are owned by the Chinese government. Consultants involved in the project include the Engineering and Development Corporation of the Philippines (EDCOP), an engineering consultancy firm founded in 1955; PRIMEX, a Philippines-based real estate company founded in 1986; and SMEC, a consultancy services company headquartered in Australia.

There are three main categories of concern regarding the impact of NCWS-KDP: its environmental impact, socio-cultural impacts, and the project’s financial terms.

In regards to environmental impact, several groups have expressed opposition to the NCWS-KDP. After granting the project’s Environmental Compliance Certificate, the government downplayed the threat of a sizable flood occurring in the case of structural damage to the dam caused by an earthquake. Officials claimed that there are no active faults near the dam.

In terms of socio-cultural impact, NCWS-KDP threatens to displace up to 10,000 members of the Dumagat-Remontado indigenous people group who live in the project area. These Dumagat communities depend on farming for a majority of their income as well as working for Sierra Madre hikers. The loss of their farmland leaves their economic future uncertain. The site is also the location of sites sacred to the Dumagat people. The government claims that only 46 families stand to be affected by the project.

There are also political issues concerning the project’s finance and governance. Based on the interest rates, the contracts with China put the Philippines at a significant disadvantage. The loan agreement also waives sovereign immunity, and includes and unfavourable confidentiality clause, and the arbitration terms. The level of transparency accorded by the government to the public is, at best, perfunctory. Researching about the Kaliwa Dam Project led to dead-end or conflicting information most of the time.

Average Transparency Score:
2.76/6
  • Not Transparent
  • Transparent
Project & Contract Phase Project Information Score Response Link to Information
Project Identification Project owner Metropolitan Waterworks and Sewerage System (MWSS) https://mwss.gov.ph/our-corporate-profile/
Sector, subsector Water Resources https://www.neda.gov.ph/wp-content/uploads/2020/09/Revised-List-of-IFPs-as-of-19-August-2020.pdf
Project name New Centennial Water Source-Kaliwa Dam Project (NCWS-KDP) New Centennial Water Source-Kaliwa Dam Project (NCWS-KDP)
Project Location Sitio Cablao, Brgy. Pagsangahan, General Nakar, Quezon / Sitio Queborosa, Brgy. Magsaysay, Infanta, Quezon https://mwss.gov.ph/projects/new-centennial-water-source-kaliwa-dam-project/
Purpose To provide redundancy of water source and augmentation of water supply in order to meet the increasing demand in Metro Manila and neighboring vicinities (Cavite and Rizal). https://emb.gov.ph/wp-content/uploads/2019/08/Kaliwa-Dam_EIS.pdf
Project description

Kaliwa Dam Project or the New Centennial Water Supply Project is a new water source to be constructed to meet the increasing demand of the people of Metro Manila, Rizal and Quezon (17.46M people of 3.49M household) by constructing another dam and to reduce total dependence on the Angat Dam.

This “climate resilient” project is envisioned to help Angat Dam, based on the comprehensive studies conducted by Word Bank and JICA. This is also aligned with the Sustainable Development Goals (SDG) that is to have access to clean water supply. While it is true there are other sources of water, the cost of treatment is so high. This is already published in books – Kaliwa, Kanan and Agos rivers can help us achieve water security.

This is also aligned with the SDG regarding access to clean water supply.

https://mwss.gov.ph/projects/new-centennial-water-source-kaliwa-dam-project/frequently-asked-questions/
Project Preparation Project Scope (main output)

1. Dam structure: Barangay Pagsangahan, General Nakar, Quezon, and Barangay Magsaysay, Infanta, Quezon (60-meter high with an initial supply of 600 million liters per day);

Dam Capacity: 57 cubic meters; With spillway, diversion tunnels, low level outlet and reservoir.

2. Tunnel: 4m diameter x 27.70 km; depth from lowest peak (70m); depth from highest peak (500m)

3. Water treatment plants

https://mwss.gov.ph/projects/new-centennial-water-source-kaliwa-dam-project/frequently-asked-questions/
Environmental impact · The Land/Water Terrain-modification, soil displacement, and erosion
· Deterioration of river water quality
· Death, disturbance and displacement of wildlife species; destruction or damage to habitat
· Disturbance of aquatic habitat death or temporary displacement of species (MS)
· Increase in solid waste generation
· Permanent loss, disturbance to existing vegetation
https://emb.gov.ph/wp-content/uploads/2019/08/Kaliwa-Dam_EIS.pdf
Land and settlement impact · Loss of land/farm area, properties, crops and community facilities including traditional access to these areas and attendant dislocation and loss of income due to right-of-way acquisition
· Portions of the project area lies within the ancestral domain (AD) of the Dumagat Remontado IPs
· The ADs covers the Kaliwa Watershed and its river systems with several identified sacred and ritual sites, and source of drinking water
http://eia.emb.gov.ph/wp-content/uploads/2019/09/ESP-in-English.pdf
Contact details 4th Floor, Administration Building, MWSS Complex, 489 Katipunan Avenue, Balara, Quezon City, 1105 https://mwss.gov.ph/contact/
Funding sources Official Development Assistance (ODA)
Export-Import Bank of China
https://www.dof.gov.ph/download/kaliwa-dam-project-loan-agreement/?wpdmdl=23115&refresh=6076e831429111618405425
Project Budget PHP 12.189 Billion https://www.dof.gov.ph/download/kaliwa-dam-project-loan-agreement/?wpdmdl=23115&refresh=6076e831429111618405425
Project budget approval date Approved by the NEDA Board of the NCWS-KDP under Official Development Assistance (ODA) from China on 27 June 2017 https://www.pna.gov.ph/articles/1065164
https://mwss.gov.ph/why-the-ncws-kaliwa-dam-instead-of-the-japanese-proposed-kaliwa-weir-project/
Project Completion Project status (current) 9.44% overall accomplishment (as of March 2021) https://mwss.gov.ph/projects/new-centennial-water-source-kaliwa-dam-project/new-centennial-water-source-kaliwa-dam-project/
Completion cost (projected) PHP 12.189 Billion https://www.dof.gov.ph/download/kaliwa-dam-project-loan-agreement/?wpdmdl=23115&refresh=6076e831429111618405425
Completion date (projected) Project Duration: 2019 – 2023 (5 years) https://mwss.gov.ph/projects/new-centennial-water-source-kaliwa-dam-project/frequently-asked-questions/
Scope at completion During the website’s latest update, no information was available publicly.
Reasons for project changes During the website’s latest update, no information was available publicly.
Reference to audit and evaluation reports · Consolidated Audit Report on Official Development Assistance Funded Programs and Projects
· MWSS statement on COA observations
· MWSS audit and observations
https://www.coa.gov.ph/index.php/reports/official-development-assistance-oda-projects?download=42390:oda-programs-and-projects
https://mwss.gov.ph/mwss-statement-on-the-coa-observations-on-the-new-centennial-kaliwa-dam-project/
https://ro.mwss.gov.ph/wp-content/uploads/2020/10/12-MWSS2018-2019_Part2-Observations_and_Recomm.pdf
Procurement Procuring entity Metropolitan Waterworks and Sewerage System (MWSS) https://mwss.gov.ph/our-corporate-profile/
Procuring entity contact details 4th Floor, Administration Building, MWSS Complex, 489 Katipunan Avenue, Balara, Quezon City, 1105 https://mwss.gov.ph/contact/
Procurement process National Competitive Bidding Process https://www.philstar.com/headlines/2019/08/20/1944865/coa-spots-irregularities-kaliwa-dam-deal
Contract type Detailed Engineering and Design and Construction https://mb.com.ph/2020/09/09/coa-questions-technicalities-in-kaliwa-dam-project/
Contract status (current) During the website’s latest update, no information was available publicly.
Number of firms tendering 3 (China Energy Engineering Corporation, Power Construction Corporation of China Limited and Consortium of Guangdong Foreign Construction) https://business.inquirer.net/277187/p18-7-b-kaliwa-dam-project-a-negotiated-deal-says-coa
Cost estimate During the website’s latest update, no information was available publicly.
Contract administration entity
Contract title NCWS-KDP 001-2018 https://www.dof.gov.ph/download/kaliwa-dam-project-loan-agreement/?wpdmdl=23115&refresh=6076e831429111618405425
Contract firm(s) China Energy Engineering Corporation Limited (CEEC) https://mwss.gov.ph/projects/new-centennial-water-source-kaliwa-dam-project/frequently-asked-questions/
Contract price

Total Contract Loan: USD 211,214,646.54

https://www.dof.gov.ph/download/kaliwa-dam-project-loan-agreement/?wpdmdl=23115&refresh=6076e831429111618405425

Actual contract price with CEEC is not available.

Contract scope of work During the website’s latest update, no information was available publicly.
Contract start date and duration During the website’s latest update, no information was available publicly.
Implementation Variation to contract price During the website’s latest update, no information was available publicly.
Escalation of contract price During the website’s latest update, no information was available publicly.
Variation to contract duration During the website’s latest update, no information was available publicly.
Variation to contract scope During the website’s latest update, no information was available publicly.
Reasons for price changes During the website’s latest update, no information was available publicly.
Reasons for scope & duration changes During the website’s latest update, no information was available publicly.

 

The New Centennial Water Source-Kaliwa Dam Project (NCWS-KDP)