Group flags ballooning dam budget; NIA defends cost adjustments

By Rjay Zuriaga Castor

A group opposing the Jalaur River Multipurpose Project Phase II has raised alarm over the project’s ballooning cost, while the National Irrigation Administration defended the adjustments as properly evaluated and legally approved.

In a Sept. 17 open letter to the Iloilo provincial government, Jalaur River for the People’s Movement (JRPM) called for greater transparency and accountability in the implementation of the controversial mega dam project.

The group flagged several concerns, including the withdrawal of South Korean firm Daewoo E&C as the international contractor and the PHP 7.088 billion in unprogrammed funds allocated in the 2024 national budget.

JRPM also pointed out that the project’s total cost has swelled to approximately PHP 20.09 billion — nearly double its original PHP 11.2 billion proposal from more than a decade ago.

The dam is funded through a mix of Philippine government appropriations and a loan from the South Korean government.

The letters were addressed to Iloilo Gov. Arthur Defensor Jr., Vice Gov. Nathalie Ann Debuque, and Sangguniang Panlalawigan Environment Committee Chairperson Amalia Victoria Debuque.

The governor and vice governor were reportedly on official business when the letters were delivered, while SP Debuque received her copy in person.

JRPM said Debuque was urged to examine their transparency concerns.

“The province, above all, has the responsibility to uphold transparency, ensure accountability, and safeguard the safety of its Ilonggo constituents,” the group said.

They called on the provincial government to launch an independent review of the project’s budget, contracts, and potential safety risks.

“The billions poured into JRMP II are people’s money, and the risks are borne by the people of Iloilo,” JRPM said.

“We expect the provincial leadership to act decisively before it is too late.”

‘INACCRURATE’’

NIA, in response, warned the public of what it claimed as “misleading information” purportedly spread about the Jalaur Dam.

“These inaccurate and unsubstantiated claims were purposely meant to distort facts and mislead the public,” the agency said in an advisory on September 19.

“All accusations should have been properly addressed had these groups exercised due diligence in making their inquiry with our office,” it added.

NIA stressed that the project’s cost adjustments went through the proper process and were cleared by the highest economic body of the government.

It clarified that on July 19, 2023, the National Economic and Development Authority (NEDA) Board approved a restructuring request for the dam’s construction. This included an increase of PHP 8.487 billion to cover cost adjustments.

“This increase in project cost was not sudden, but went through the required procedures, guidelines and due diligence for Infrastructure Projects through the Investment Coordination Committee of NEDA. It was deliberated and approved by appropriate government agencies and instrumentalities,” it argued.

NIA also explained that the main factor behind the increase was the peso’s depreciation against the US dollar. When the project was approved in 2012, the exchange rate stood at PHP 43.10 per USD.

By December 2022, NEDA had set the rate at PHP 55.684 per USD, which raised tax obligations and civil works costs for the contractor.

“The official currency used in the loan is in USD. This likewise explains why the peso value of the loan after the approval of the restructuring request exceeded the 8.9 billion pesos value from the forex conversion during the loan approval in 2012. However, it is important to note that the loan amount remained the same at USD 207M per approved loan agreement,” it added.

For the international contractor’s contract, NIA also previously explained to Daily Guardian that Daewoo E&C did not withdraw from its contract, citing that the parties had mutually agreed to amend the contract.

NIA also noted that Daewoo E&C’s decision was influenced mainly by the escalation of project costs and other considerations, not the site’s rugged terrain.