Costly, Incomplete Irrigation Projects Being Paid for by Gov’t, Farmers at Losing End

Delays in government irrigation projects, and unresolved inquiries and cases of corruption pertaining to these are costing taxpayers millions since 2002. But in the end, it is the small farmers bear the brunt of corruption, said IBON Foundation Research Head Jose Enrique Africa.


Delays in government irrigation projects, and unresolved inquiries and cases of corruption pertaining to these are costing taxpayers millions since 2002. But in the end, it is the small farmers who bear the brunt of corruption, said IBON Foundation Research Head Jose Enrique Africa.

In his presentation at the launching of the Transparency International’s Global Corruption Report (GCR) 2008: Corruption in the Water Sector, Africa cited two irrigation projects rigged with irregularities – the Casecnan Multipurpose Irrigation and Power Project (CMIPP) in Nueva Ecija and the Talibon Small Reservoir Irrigation Project in Bohol. Said projects discussed in the Philippine case studies were presented by Africa to the GCR 2008.


The CMIPP has two components – a $675 million build-operate-transfer (BOT) project that diverts water from two rivers, runs this through a hydroelectric power plant, and collects it in a dam; and a P6.8 billion irrigation component for distributing water to 53,000 hectares of rice land and for rehabilitating irrigation systems for 55,100 hectares more.

Africa identified controversies in the approval of the project. He said that an inter-agency committee,

which evaluated the project, found the CMIPP not financially viable. “They found that over the 20 year life span of the project, they estimated it would be able to deliver water only about 53 percent of the time.”

He also revealed that an agreement was executed even before going through the appropriate processes. The National Irrigation Administration (NIA) executed an agreement with the contractor CE Casecnan Water and Energy Company, Inc., a local subsidiary of California Energy International, in November 1994.

“It was controversial because it was only submitted to the appropriate government body, the Investment Coordination Committee of the NEDA (National Development Authority) three months later, in January, 1995, and the approval was actually made only in May 1995.”

Africa also pointed out that the project was unsolicited and therefore, under the law, it should not qualify for government guarantees.

He said the implementation was also problematic as project delays were quite significant. Although the target completion of the project was supposed to be in 1998, construction for the irrigation component only started substantially in 2003. It was supposed to be completed by 2008.

Africa said, “The delay is a problem because of government guarantees. The government has been paying water delivery fees since 2002 even as the project has not yet been completed.”

The Philippine government had paid $320 million in guaranteed water delivery fees from 2002-2006. “This was paid despite the fact that less than one and a half percent of the land to be irrigated by the project has been irrigated. A total of 50, 000 hectares have yet to be irrigated.”

Africa blamed the ‘onerous’ contract with the Casecnan CE that obliges the NIA to pay water delivery fees of a minimum guaranteed dollar-denominated amount for 20 years whether or not any water is actually delivered or any farmland is actually irrigated.

Over the same period, Africa said, the total gross revenuesof NIA was just $170 million but they had to pay the CE Casecnan $320 million. The Bureau of Treasury has been paying these water fees on behalf of NIA and considers these as loan to NIA.

In 2006, NIA paid $77.2 million to CE Casecnan.

Missing dam

Meanwhile, the P199.4-million Talibon Small Reservoir Project (TSRP) in Talibon, Bohol was supposed to irrigate 1,000 hectares of land.

Africa said the project was conceived in 1987 and the provincial irrigation office at that time reportedly found it to be not viable. In any case, surveying and pre-engineering work started and bids were solicited in 1995. A private contractor, which submitted the lowest bid lost, allegedly upon the lobbying of a lawmaker. By 1998, the Bohol Provincial Irrigation Office requested authority to undertake the project.

Construction was supposed to finish in 1999 but until now, it remains incomplete. An investigation in 1995 by a local anti-corruption alliance found that although P119.1 million ($4,639,837 at the 1995 average exchange rate of $1=P25.669) had already been spent, there was still no sign of any reservoir, dam or irrigation.


Africa revealed that the controversies surrounding the two projects remain unresolved.

In 2002, the Senate had more than a dozen hearings regarding the CMIPP.

“Unfortunately, after all the hearings, the final report was never completed…Close connections to the president at that time were allegedly abused to keep the project. At the end of the day, there was no conclusion,” said Africa.

The CMIPP and the Senate inquiries regarding it were conducted during the term of President Fidel Ramos. Despite the anomalies, Africa said the project was pushed through on the strength of, among others, memorandums from Ramos in May 1993, which sought investors for the projects and in November 1994 to fast-track the approval process.

In 2006, the Senate also initiated an investigation into the TSRP. But like the CMIPP, there was no conclusion. A case against local NIA officials was filed before the local office of the Ombudsman in 2004 but remains stalled to date.

Renaud Meyer, United Nations Development Programme (UNDP) country director, who attended the launching of the GCR 2008 expressed disbelief that Senate inquiries went to naught.

Farmers at the losing end

Africa said farmers are at the losing end.

He said that small farmers in Talibon, Bohol lost in three ways: the labor they contributed to the construction valued at P1.2 million ($46,748); the land they ‘voluntarily donated’ and the crops foregone to make way for the project’s canals and roads and for which they were never compensated; lastly, they still have no irrigation to speak of.

Africa further said, “Many small farmers in Nueva Ecija are hoping that water will finally pass through the canals into their rice fields. Few, if any, are aware that they would be using the most expensive water in the country that is being paid for by the national government at the expense of other irrigation projects, which might have been developed for millions of irrigation-less small farmers elsewhere.”

Africa said agriculture is important to the Philippine economy. The state of local agriculture, however, remains backward. The lack of irrigation aggravates the situation. Only 30 percent of the total agricultural land is irrigated.

He reaffirmed the fundamental characteristics of corruption presented by Priya Shah of the Water Integrity Network (WIN) – public officials have wide discretion and little accountability, weak enforcement mechanisms, and the benefits being greater than the risks of getting caught. “Quite clearly, our struggle against corruption is also a struggle for good government and a struggle for more meaningful political change.” (Bulatlat)


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