THE P5-billion project involving the dredging of the Pasig River four years ago was tainted with irregularities and President Benigno Aquino 3rd wants the contractor, a Belgian firm whose deal to dredge the Laguna de Bay was scrapped in 2010, held liable for shortchanging the government.
Aquino, in his commencement speech at the graduation rites of the Philippine
Science High School (PSHS) in Quezon City, disclosed that the government is now working to identify those responsible for the anomaly, including officials of the foreign firm.
“The contractor said they conducted dredging. To be sure, I asked the DOST [Department of Science and Technology] and experts from the UP [University of the Philippines]-National Institute of Geological Sciences. The result of their study indicated that if there was dredging, it was sure the contractor did not follow what was stipulated in the contract,” the President said.
Aquino was referring to the Pasig River Dredging Project undertaken by the Baggerwerken Decloedt en Zoon or Belgian Dredging Co. (BDC) that required the removal and containment of nearly 3 million cubic meters of debris and sediment in a 19-kilometer stretch of the river.
The project, which ran for a year beginning late 2009, cost P5.038 billion, inclusive of the P34.05-million grant by Belgium to the Philippines. Of this amount, around P646 million was acquired through a soft loan payable for about 14 years after the completion of the project with zero interest. The remaining P4.392 billion was covered by a commercial loan payable for 10 years with an interest rate based on prevailing European commercial rates.
The Pasig River Rehabilitation Commission (PRRC), which supervised the project, said the loan package was made possible through the Belgian Supersubsidy Facility and was covered by six credit agreements.
Aquino cited the project as among those tainted with corruption that was approved during the time of his predecessor, former President and now Rep. Gloria Arroyo of Pampanga.
“Now, we are making steps to ensure that those who are answerable will be made answerable,” he said.
The President told fellow government officials, PSHS graduates and guests that public funds should be spent prudently and wisely, especially for big-ticket projects.
“We will spend for what is due so that government funds will not be wasted. That is why I have ordered the DOST to form a group of experts who cannot be fooled by suppliers, especially when it comes to big-ticket items,” Aquino said.
For her part, PRRC Chairman Gina Lopez of the ABS-CBN Foundation described the dredging project as “crazy,” judging by the amount spent for a project that ran only for about a year.
Lopez, who is in the US, told The Manila Times in a text message that Aquino’s sentiments against the project were “rightfully so.” She confirmed that the subject of the President’s tirade was the project of the foreign group.
“Five billion pesos. That [was]the amount spent. I think it’s crazy. We could have used that money so much better,” Lopez said.
She clarified that she was not yet the chairman of PRRC “when the whole thing happened.”
“I never would have agreed. But there are staff in PRRC that were there when the whole thing happened,” Lopez pointed out.
The dredging project’s implementation was initially planned to run for six years but then Environment Secretary Lito Atienza cut down the duration to three years.
PRRC officials and BDC engineers announced that they will make use of two Underwater Placement Overdepth with Capping (UPOC) somewhere in Manila Bay that could accommodate 2.8 million cubic meters of sediments from the Pasig River. The dredged materials will be contained using the UPOC technology, a confined disposal facility that involves the excavation of the containment cell at the seabed using a tractor suction hopper dredger or mechanical clamshell bucket.
The project aimed to improve water quality of the river to reduce health risks, enhance water transport potentials and eliminate or mitigate flooding in Metro Manila.
The BDC was supposed to undertake dredging of the Laguna Lake in 2010 but Aquino scrapped the deal because of the controversies surrounding the Pasig dredging project.
The P18.7-billion Laguna Lake Rehabilitation Project (LLRP) that BDC was supposed to implement within 750 days after the contract was approved was the first contract of a foreign firm that Aquino voided on suspicion that it was a “midnight deal” of the Arroyo administration because it was approved in February 2010 or just three months before the elections for president.
BDC is a 150-year-old firm that specializes in dredging projects in Europe and other parts of the world.
Justice Secretary Leila de Lima, in an August 2010 legal opinion, found nothing wrong with the bay project, saying it “cannot be construed as a midnight deal since it is covered by official development assistance from the Belgian government.”
Critics see the scrapping of the project as the primary cause of flooding in the provinces of Laguna and Rizal, the South Luzon Expressway and parts of Metro Manila.
Laguna de Bay, they said, was so much silted that it could not contain the heavy monsoon rainwater that comes annually.
Besides the cancellation of the project, BDC has become the subject of dispute before the International Center for Investment Disputes. The Belgian firm demanded P6 billion in damages while the government was said to likely incur legal costs of about P1 billion.