By Lara Climaco | FilAm Star Correspondent
China-led Asian Infrastructure Investment Bank (AIIB) selected the Metro Manila Flood Management Project as its first foray in the Philippines. In a co-financing arrangement with the World Bank (WB), AIIB will provide US$207.6 million of the US$500-million cost to modernize drainage areas in the metropolis, reduce the amount of garbage accumulated near these drainage areas and to clear waterway areas of informal settlers whose presence there place their lives at risk and worsen flooding in the nation’s capital.
The WB is forking over the other US$207.6 million, while the Philippine government will contribute counterpart funding amounting to US$84.79 million to cover the project cost.
The concessional loans from the AIIB and WB each carries a 25-year term and includes a grace period of 14 years. Approved late last month for funding, the project officially starts this month and is expected to be completed by May 2024.
“The master plan will take 25 years to implement but this phase of modernizing Metro Manila’s pumping stations will ensure that several million residents will be less vulnerable to floods,” Department of Public Works and Highways (DPWH) Sec. Mark Villar was quoted in the press release announcing the loan approval.
Mara Warwick, WB country director for Brunei, Malaysia, the Philippines and Thailand, as well as AIIB Director General for Investment Operations Supee Teravaninthorn likewise hailed the project as an important step in fighting poverty, with the poorest populations living near drainage areas most at-risk during storm surges and the flooding that follows heavy rains.
“Investing in sustainable infrastructure is a key priority for AIIB and we feel this project is a great fit for our first investment in the Philippines,” Teravaninthorn was quoted in the press release.
“When floods occur, peoples’ capacity to earn a living is constrained, impoverishing many more. Hence, investments that improve flood management also strengthen the country’s efforts to fight poverty as well as boost resilience against the impact of climate change,” Warwick added.
Engineer Lydia Aguilar of the DPWH’s Flood Control Management Cluster told FilAm Star that existing pumping stations would be upgraded with more efficient and higher capacity units, while new pumping stations would be built in strategic areas of Metro Manila. The project also involves the clean-up of related waterways, improving solid waste management within the vicinity of the drainage system served by the targeted pumping stations. The resettlement component includes informal settler families within the vicinity of pumping stations and those affecting the proper operation and maintenance of the selected pumping stations and associated drainage systems.
“Designing and investing in a better drainage system would reduce the vulnerability of the population to future flood events and would improve people’s health conditions,” Aguilar said.
“Good international practices” would be the basis for selecting equipment to be used for the project’s modernization component, she added. International competitive biddings will be conducted for the procurement of goods and services, in line with the WB’s procurement guidelines.
“There will be no contractors specified for this project as this is open to all countries that are interested and are eligible to participate that can comply with all the necessary requirements,” Aguilar said in reply to a query on whether an American company, the Dutch or the Japanese would be tapped for the project.
Project documents show that most pumping stations will be designed by the DPWH either in-house or with the support of engineering consultants. Contractors would then be tapped to manufacture and install custom-built pumps, and for associated civil works. Especially for new pumping stations, the agency is open to adopting “design, manufacture and install” practices.
The Metro Manila Flood Management Project covers an estimated drainage area of 11,100 hectares, focusing on 56 potentially critical drainage areas across Metro Manila. About 20 new pumping stations will be constructed and some 36 existing pumping stations improved, along with related fixtures such as trash racks and flood gates.
A total of 370,000 households, involving some 1.7 million people, will directly benefit from the project, which will be immediately implemented in the Vitas, Balut and Paco drainage areas in Manila, Tripa de Galina in Pasay, and the Labasan drainage area in Taguig.
About US$45 million worth of procurement contracts is expected to be awarded on the project’s first year alone. The project will be implemented over the next seven years.
“The Philippines is a founding member of AIIB, as well as a developing country with huge infrastructure development need. AIIB is willing to provide financing support to improve Philippine’s infrastructure in the coming future,” said Song Liyan, senior communication officer at AIIB, in reply to questions on how much support the bank would extend to the Duterte administration’s massive “Build, Build, Build” program, which relies heavily on official development assistance.
As a rule of thumb, AIIB supports only high-standard infrastructure projects that are financially sustainable, environmentally friendly and socially acceptable, it was added. AIIB has approved financing amounting to US$3.49 billion across 11 countries in less than two years since its founding. Most of its approved projects are co-financed with other multilateral development banks.
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