Just a few hours of rain resulted in massive flooding in Manila last week, with commuters, rich and poor, outraged at government’s helplessness.
Communications Secretary Ricky Carandang reported a “master-plan” for flood control was underway, but that would take several years to implement.
“You can’t assign responsibility to an agency or one person,” said Carandang of the flood.
Oh, but there is somebody responsible, and that person was the one who blocked the project—a major one—that could have significantly helped solve the perennial problem: President Aquino.
There was a master plan already in existence way back in 2009, with the first phase scheduled to start in 2010, but Mr. Aquino had aborted it.
Reprinted in full below is my article on the subject, originally published in the Philippine Daily Inquirer on August 15, 2012.
Neither Aquino nor any of his officials has challenged any single assertion or data in this piece. There is an important update on the issue below.
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President Benigno Aquino 3rd axed in November 2010 one of the country’s most ambitious flood-control projects that was scheduled to start that year. If he had not cancelled that milestone undertaking, it would have been completed last month [July 2012] and would have significantly mitigated the disastrous flooding of recent weeks.
The venture was the Laguna Lake Rehabilitation Project, which, as part of its plan to save the lake, would have dredged it of 4.6 million cubic meters of silt and waste so it would contain more floodwaters. The project would have also involved the deepening of the critical 7-kilometer Napindan Channel in Taytay so that it could better and more quickly draw floodwaters away from the metropolis to the lake.
Costing P18.7 billion, the project was to be undertaken by the 150-year-old Belgian dredging firm Baagerwerken Decloedt En Zoon (BDZ) and financed by a loan from the BNP Paribas Fortis bank, with Brussels providing a P7-billion grant—the biggest development aid it would have given the country ever.
“A much deeper Laguna de Bay would relieve residents of Metro Manila, Rizal and Laguna of the flooding that happened at the height of [Tropical Storm] Ondoy and [Typhoon] Pepeng,” Laguna Gov. Jorge Ejercito, an ardent supporter of the project, summed up the aim of the planned massive dredging—in September 2010.
Why did Mr. Aquino cancel such a crucial project? Because of his irrational, apoplectic bias that everything his predecessor did or planned was corrupt. Just a few months after he assumed office, Mr. Aquino claimed that the project was a “midnight” corrupt deal during President Gloria Macapagal-Arroyo’s administration.
“They have been trumpeting that corruption tainted the project,” the Laguna governor said angrily in 2010. “But where is their evidence? Just to find fault in the past administration, Laguna residents will be at the receiving end of their vengeful politics.” To this day, Mr. Aquino has not presented an iota of evidence, or even any specific charge of corruption, in the project.
On the other hand, then Belgian Prime Minister Yves Leterme vouched for the project’s integrity, and even submitted to Mr. Aquino an independent engineering firm’s evaluation of the project. “As I understand from the report of this expert, which is enclosed, the project can be an undeniable improvement for the Metro Manila area and alleviate flooding, improve local transport infrastructure and increase water capacity,” Leterme wrote in a letter to Mr. Aquino in March 2011.
Leterme, now deputy secretary general of the Organization for Economic Development and Cooperation, appealed to Mr. Aquino to allow the Belgian contractor to respond to the allegations against the project. Mr. Aquino rebuffed Leterme. Instead, he ramped up his opprobrium against the project, saying as recently as last week that the project was a “big joke” since it would “just dump silt to be recovered to another portion of the lake.” (In his memorandum canceling the project, though, Mr. Aquino gave no explanation for his action.)
That is an utter lie. The project very clearly specified that the dredged material would be deposited in designated sites off Taytay-Angono and San Pedro, which in fact would become reclaimed land where waste-water treatment facilities would be built.
Seven government departments, agencies and interdepartmental bodies evaluated the project for three years, and endorsed it for immediate implementation in 2010. Bangko Sentral ng Pilipinas governor Amando Tetangco Jr. said in his approval of the project’s foreign funding: “Its purpose is to improve the Lake’s capacity as a catch basin to reduce flooding in nearby towns and cities.”
Mr. Aquino’s Justice Secretary Leila de Lima, in her August 2010 legal opinion, found nothing wrong with it: “The project cannot be construed as a midnight deal since it is covered by official development assistance from the Belgian government.” The Laguna Lake Development Authority general manager whom Mr. Aquino appointed supported the project.
Fish pen operators in the lake, environmentalist NGOs, and most of the political leadership of towns around Laguna de Bay passionately pushed for the undertaking, since it would have stopped the lake’s environmental deterioration and lead to the transformation of the lakeshore into a modern area with fish ports, ferry terminals, and marina complexes.
Other than Mr. Aquino and Sen. Franklin Drilon who claimed “dredging is a rich source of corruption,” the main opposition to the project came from Pamalakaya, the communists’ agitprop group for fishermen’s issues—a member of Communist Party founder Jose Ma. Sison’s International League of Peoples’ Struggle.
The story gets worse. As a result of Mr. Aquino’s reckless, unilateral cancellation of the project, P6 billion of taxpayers’ money could be lost. Firstly, government has to pay by the end of this month the P420-million penalty for the cancellation of the bank loan.
The gigantic cost though would be the P4 billion that would be paid to the Belgian contractor if it wins the suit it filed for Mr. Aquino’s cancellation of the project at the World Bank’s International Centre for Settlement of Investment Disputes (ICSID).
Government’s legal expenses would amount, going by its Fraport case in the same venue, to at least P2 billion. The judges for the dispute were designated last Feb. 29, and the case formally started on June 25.
The cancellation of this crucial flood-control project will go down in Philippine history as the country’s most tragic, most shameful episode in which billions of pesos in taxpayers’ money were wasted, hundreds of lives were taken, and hundreds of thousands of flooded Filipinos put in misery because of the irresponsible ill-will of a President toward his predecessor.
The case against the Philippine government at the ICSID has been proceeding at the court’s normal pace.
On June 25, 2012 the Belgian firm BDZ filed its “memorial”, the technical term for such petitions at the ICSID. A highlight of the complaint was that Aquino’s administration had not even formally informed the Belgian firm that it was stopping the contract.
BDZ representatives in Manila learned about this only when they listened to Aquino’s speech ridiculing it, and condemning it as a grossly corrupt project of President Arroyo. After a week, Finance Secretary Cesar Purisima informed the firms’ representatives over the phone to tell them that he was instructed not to sign the final documents for the project to proceed. After about a month of trying—unsuccessfully—to get documents that would have officially informed them that the Philippine government was aborting the projects, BDZ officials in Manila gave up and left the country.
After nearly three years since Aquino ordered the project stopped on grounds that it was ridden with corruption, his officials have been unable to produce any single evidence of graft involving the project, nor even explain how corruption could have been undertaken through the lake-dredging contract.
From October 17 to December 11, 2012 all procedural matters at the ICSID were settled, and our government filed its counter-memorial. On April 29, 2013, the Belgian firm filed its reply on the Philippine government’s arguments.
BDZ’s claims is expected to reach the equivalent of P5 billion, because of the peso’s deprecation. If the country loses the case, it would be P5 billion down the drain, an amount that if had been used for the flood-control project would have alleviated the misery of millions of Manila residents by this time.
So far, the government has reportedly nearly spent P500 million in legal fees and expenses of its Washington-based counsel White and Case and local counsel Justice Florentino P. Feliciano.
Both Mr. Feliciano and White and Case are also the government’s private counsels defending it against the suit filed by Fraport AG Frankfurt Airport Services involving the contract to build the NAIA terminal III.