Reviving The Kaliwa Dam Proposal

Reviving the Kaliwa Dam proposal
In March, just as the country was readying itself to face the onslaught of the dry season, millions of
Metro Manila residents woke up to a citywide water interruption that, as of this writing, has not yet
been completely restored. This almost overnight shortage forced many citizens to line up at fire
hydrants, missing jobs and classes, just so they can ensure that they have water – however little – at
home.
They blamed the lack of water supply on Manila Water, saying that the company was greedy and
incompetent for not having been able to foresee this crisis. Manila Water, in response, claimed that the
situation was a result of a shortage on the current primary water sources of Manila, the Angat-Ipo-La
Mesa dams.
Due to these series of events, talks have resurfaced about the creation of better infrastructure to ensure
that water supply will never be a problem, especially in Metro Manila, including a series of dams which
will be erected in the Sierra Madre mountains, the Kaliwa Dam project.
Offered as a solution to the water crisis and usual water shortages in the summer months, the project
has been discussed since the Marcos era, but has never become reality because of strong opposition
from civil service groups and indigenous communities, claiming it will prove to be more destructive than
beneficial in the long run.
Thus, the Kaliwa Dam project has been at a standstill for decades. That is, until now.
Chico River, Kaliwa Dam parallelisms
Among the many issues surrounding the construction of the Kaliwa Dam is its similarity to the Chico
River project – both are Chinese-funded and their contracts have almost similarly worded texts.
In a nutshell, both contracts were entered into under the Duterte administration: the Chico River loan
agreement was sealed between the Philippines and China on April 10, 2018, while the Kaliwa Dam loan
agreement was signed on November 20, 2018.
Should disputes over management, payment, and subsequent issues arise in Chico River and the Kaliwa
Dam, Beijing and Hong Kong will have jurisdiction, and their arbitration rules will be followed. These
provisions triggered a backlash because of the belief that they were tantamount to the Philippines
waiving its sovereign immunity.
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The Kaliwa Dam will be largely funded by the Export-Import Bank of China through a loan of
$211,214,646.54, which will cover 85% of the expenses. The rest will be paid for by the Philippine
government. The loan will have an interest rate of 2%, including a commitment fee of 0.3% and a
management fee of 0.3%. The contract has a maturity period of 20 years, including a grace period of 7
years.
Pros and cons
At the forefront of the discussion of the loan’s merits and demerits are the Department of Finance (DOF)
on one end, and Senior Associate Justice (SAJ) Antonio T. Carpio on the other end.
Part 2 | Road to damnation through Chinese-funded dams
We predict that future administrations will have to cancel the Kaliwa and Chico projects and default on
the Chinese loans, which will result in the Philippines being sued by China in arbitration proceedings that
have been designed to favor the creditor
Beyond the provisions of the loan agreements and contentions on patrimonial property lie the reality on
the ground, and the problems that creating dams might create.
While the Kaliwa Dam, with its expected completion by 2023, will be an alternative water source for the
residents of Metro Manila and neighboring provinces, it still faces a lot of opposition from different
groups, particularly the indigenous communities, that have been adamant about not having the dam
built ever since it was first proposed during the Marcos era.
Even politicians have started to question the propriety of such a move, with Vice President Robredo
questioning the need for asking loans, especially from China.
The Dumagat, the indigenous people who live in the areas that will largely be affected by the
construction of the dam, claim that the $12-billion project will displace them and leave them homeless.
Moreover, a part of the area where the Kaliwa Dam will be erected is considered sacred land and is a
burial ground for the departed Dumagat, which has given reason for the Dumagat to double efforts in
ensuring that the construction does not take place. Even church leaders, particularly those from the
Catholic Church, are staunch advocates of the movement against the construction of the Kaliwa Dam.
Environmentalists have also expressed their opposition to the building of the dam, as the Sierra Madre is
not just home to a wide array of indigenous groups, but also of rich biodiversity. Even the already
critically endangered Philippine Eagle might be facing extinction because of the alterations in the
landscape that creating a dam would entail.
Others have claimed that a new dam would simply be a useless extravagance, as Angat Dam, which is
the main reservoir for Metro Manila, actually has enough water to last through the dry summer months.
They say that to create a dam largely funded by a loan from the Chinese, is nothing but a flexing of
China’s muscles, and an exhibit of how easily a foreign country such as China can make large and all-
encompassing political decisions in the Philippines.
Right now, the Kaliwa Dam still lacks the environmental compliance certificate which is necessary for the
construction to take place. With the backlash this project is facing, it might be a while before actual
construction occurs, if it even does. In the meantime, the months continue to progress and the fear of
delay in payment may actually turn into fruition.
The Chinese as creditor
Another concern that is increasingly being put into the forefront of the issue is the propriety of having
China as a creditor. On the first level, it appears as though the Kaliwa Dam is not the only possible water
source for Metro Manila, as many other dams that are less destructive may be built, which can provide
the same amount of water to the surrounding areas.
On the second level, both Europe and Japan have offered to lend the Philippines the money needed for
the construction of the dam, and have actually offered less onerous alternatives through their
repayment schemes, which were not considered by the government. Interestingly, Japan even came up
with a cheaper substitute, which will come at practically no cost to the government with none of the
environmental hazards the Kaliwa Dam can potentially cause. It proposed the creation of a weir, which is
significantly cheaper and won’t have to displace the indigenous peoples living in the area. The
government has since rejected this idea.

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Reviving the Kaliwa Dam proposal

Chico River, Kaliwa Dam parallelisms

Part 2 | Road to damnation through Chinese-funded dams

The Chinese as creditor

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