By Francis Allan L. Angelo
http://www.bworldonline.com/main/content.php?id=8006
ILOILO CITY — The P500-million bulk water supply project of the Metro Iloilo Water District has been shelved for lack of clearance from the Government Procurement Policy Board (GPPB).
The project was to be awarded to Maynilad Water Services, Inc., Solerex Water Technologies, Inc., and Abejo Builders Corp., which won the bidding held late last year.
Celso G. Javelosa, water district board chairman, said the utility decided to freeze the pro-ject due to oversight on the part of the Special Bids and Awards Committee.
Adrian N. Moncada, board vice-chairman, said the utility was about to award the contracts to the winning bidders in December 2009. The committee, however, informed the utility board about the provisions of Executive Order No. 645 which requires procurement board approval for projects worth at least P500 million.
“The bids and awards committee was late in informing us about this,” he said.
The water utility’s board then opted to enter into negotiated procurement with the suppliers to speed up implementation of the project in view of the dry spell caused by the El Niño phenomenon. It wrote the procurement board to seek clearance for the negotiated procurement.
The procurement board, however, rejected the proposed negotiated procurement in a letter to the Iloilo water district dated Feb. 24.
Ruben S. Reinoso, Jr., review committee chairman of the procurement board, said in the letter that the reasons presented by the water district “do not legally justify resort [sic] to the alternative method of negotiated procurement” due to emergency cases.
“Any procurement to address this emergency should have taken place in 2008 if it seeks to provide immediate remedy,” Mr. Reinoso said.
Mr. Reinoso also said the 10-year period of the bulk water supply project “appears to be inconsistent with the primary objective of providing immediate relief.”
“It also unnecessarily ties the procuring entity to a contract procured without the benefit of public bidding,” he added.
Maynilad President Rogelio L. Singson told BusinessWorld the bidding process was questioned by the National Economic and Development Authority (NEDA).
“We actually submitted the lowest supply price but they decided not to award because of NEDA’s disapproval,” Mr. Singson added.
The procurement board, which was created by Republic Act 9184 (Government Procurement Modernization Act), crafts policies, implementing regulations, and standard documents; produces guidelines and manuals; and oversees training conducted by procurement agencies.
The bulk water supply project aimed to buy 20,000 cubic meters of water from private suppliers daily for 10 years to serve part of its 31,000 consumers in Iloilo City and neighboring towns of Pavia, Sta. Barbara, Cabatuan, Maasin, San Miguel and Oton.
The winning bidders were to look for their own sources and establish the supply which will connect to the water district’s four injection points in Jaro, Iloilo City and the towns of Leganes, San Miguel and Pavia.
Maynilad won the contract for the Pavia injection point, which has a capacity of 10,000 cubic meters (cu. m.), at P11.98 per cu. m. Solerex got the Leganes injection point (2,000 cu. m.) at P14.28 per cu. m., while Abejo will supply 8,000 cu. m. of water through the San Miguel and Ungka (Jaro) injection points at P13.98 per cu. m.
The winning bidders offered rates below the P15.00 stipulated in the water utility’s terms of reference.
Mr. Singson said splitting the water concession area into four small parts was not a good idea.
“The total is less than 20 million liters per day. There’s no economies of scale. We just bid for the highest, 10 million liters per day,” he said.
Mr. Singson couldn’t say whether Maynilad would again join the bidding should it be reopened.
Ayala-led Manila Water Co., Inc. withdrew from the Iloilo bidding for bulk water services last December as “conditions the company requires for such investment were not present.”
Danilo A. Encarnacion, director of the water district, said the utility tried to appeal the procurement board’s decision with the Office of the Executive Secretary in Malacañang “but it was referred back to the GPPB.”
Mr. Encarnacion said the utility decided to shelve the project until next year as there was no more time to implement it.
This would also be the case even if the Regional Disaster Coordinating Council in Western Visayas and the Iloilo City government placed the city under a state of imminent danger.
Mr. Moncada said it would take at least four months for the supplier to design and construct a water treatment plant and transmission line for the bulk water supply scheme.
In the meantime, the utility has resorted to water rationing and water pipeline injection schemes to mitigate the effects of the water shortage.
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