Friday, March 23, 2012
ONE is better than the other.
Capitol spokesperson Rory Jon Sepulveda said the bulk water supply project that the Cebu Provincial Government will implement together with an Ayala-led consortium is more advantageous than the proposal made by the same group to the Metropolitan Cebu Water District (MCWD) in 2002.
Residential Hub of Cebu Rich & Famous, click here
Capitol entered into a joint investment agreement with a consortium—composed of Manila Water, Stateland Inc. and Vicsal Development Corp.—to tap Luyang River in Carmen town and produce 35,000 cubic meters of water a day.
In 2002, the consortium led by Ayala-led Manila Water made the same proposal to MCWD.
The proposal did not take off after MCWD disagreed with the condition set by the proponent to be able to recover development costs if it (consortium) loses the project to a challenger.
Sepulveda pointed out that the recently signed investment agreement between the Capitol and the consortium will produce water priced at P13.95 per cubic meter.
The water offered to MCWD then had a base price of P25.55 per cubic meter.
Sepulveda said Capitol’s investment—it agreed to put up a 49-percent equity for the water supply project—is governed by the Joint Investment Ordinance 2009-04, adopted by the Provincial Board.
Protection
The ordinance, he said, protects the Province’s interests in unsolicited offers, like the water supply project.
He added that the ordinance allows the Province to set “advantageous” provisions in transactions with private firms.
The proposal to MCWD, on the other hand, was governed by the build-operate-transfer (BOT) law, which grants proponents of unsolicited proposals to recover expenses
incurred in technical studies and other costs, if the project does not push through.
Under the BOT law, original proposals also have to undergo multi-level evaluation by the National Economic and Development Authority.
Under the provincial ordinance, Sepulveda said, the private proponent cannot demand reimbursement for expenses like technical studies and travel fare, among others.
The same ordinance governs the Capitol’s transactions for the Ciudad project and the business process outsourcing complex to be undertaken by Filinvest in Barangay Apas, Cebu City.
In these projects, Sepulveda said, the private firms develop Capitol-owned lots but the Province maintains ownership of the property. The private developers are also required to pay rent and give Capitol a share of their revenues.
The consortium initially proposed to Capitol to sell water from Carmen at P24 per cubic meter. But the consortium decided to match the bid of a challenger in the Swiss price challenge and lowered the water rate to P13.95 per cubic meter.
“This is business sense,” Sepulveda said.
Manila Water consultant Manuel Reyes said the firm could have lowered the water rate it proposed to MCWD but the consortium had to consider the penalties it was going to pay when it fails to deliver the promised volume.
Published in the Sun.Star Cebu newspaper on March 23, 2012.
No comments:
Post a Comment