Debt watchdog warns against signing Kaliwa Dam loan
The Freedom from Debt Coalition (FDC) warned the Duterte administration not to push through with plans to sign the bilateral loan agreement to fund the controversial Kaliwa Dam project during the coming visit of Chinese president Xi Jinping.
‘It is fairly obvious that proponents of the Kaliwa dam see Xi Jinping’s visit as an excuse to railroad the project so it can be added to the list of agreements that the Chinese eader will be signing with Pres. Duterte. We fear that in the rush to get the project signed, the legitimate concerns of key stakeholders including indigenous peoples, LGUs and local communities are being ignored,“ FDC president Rene Ofreneo said.
The FDC warned against the proposed loan agreement itself citing attached conditionalities and “patently unfavorable“ terms.
“Apart from the obvious fact that the loan will add to the country’s P7.043 trillon debt, we are concerned about the specific loan terms and conditions. Even though the loan agreement has yet to be signed for example, the Chinese have already demanded, and the Duterte government has agreed, to limit project bidders to Chinese firms only. This type of “tied aid“ often ends up benefiting the creditor country more than the country going into debt.“
“Even more worrisome, if we go by some of the Chinese loan contracts already signed such as the Chico River Pump Irrigation Project, the loan terms are significantly less favorable at 2% interest with a maturity of 20 years than, for example, a comparable loan from Japan which has interests rates ranging from 0.25% to 0.75%. At a time when our debt is ballooning due to factors such as the depreciating peso, doesn’t it make sense to exercise more fiscal responsibility by going for the most favorable loan terms available? The current General Approprations Act actually contains a provision for an audit of 20 loans that FDC identified as illegitimate. Let us not add another one to that list,“Ofreneo said.
P12.2-billion Kaliwa Dam project is designed as a dam with a 600 million-liter per day (MLD) capacity, as well as a raw water conveyance tunnel with a 2,400 MLD capacity, aimed at relieving Metro Manila’s dependence on the aging Angat dam..
‘The Kaliwa Dam, one of several dams proposed within the Sierra Madre area has long been opposed by the people because of its potential environmental, social and economic impacts. For one, the dam will be built within one of the country’s key biodiversity areas, the Sierra Madre, where preparatory activities for the dam’s construction has already caused damage including the destruction of several hundred trees. Further damage to both flora and fauna is expected once the project begins in earnest. The project needs to secure an Environmental Compliance Certificate, which has yet to be issued,“ Ofreneo added.
“In addition, the project falls within the ancestral domain of indigenous groups, particularly the Dumagat-Remontados, for which the proponent, the MWSS, needs to secure Free Prior and Informed Consent (FPIC) as mandated by Indigenous Peoples Rights Act or RA 8173. As far as we know, this key step has not been complied with yet,“Ofreneo said.
12 November 2018
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