ILOILO City – Aboitiz InfraCapital’s plan for a bulk water supply project with Iloilo City and Province is in question following a formal rejection from the National Irrigation Administration (NIA), which cited conflicts with an ongoing partnership with the Asian Development Bank (ADB).
The unsolicited “Highline Canal and Bulk Raw Water Supply Project” would have seen Aboitiz act as a middleman, sourcing raw water from the Jalaur River and selling it as treated bulk water to local districts or local government units (LGUs) of Iloilo Province and City through its planned Bulk Raw Water Intake Facility (BRWIF).
With this arrangement, Aboitiz would be paid through government-backed Availability Payments and recoup costs by charging water districts, or LGUs of Iloilo Province and City — potentially affecting water prices or tariffs in the region.
If approved, the project would have allowed Aboitiz to control a critical supply chain between the government-owned water source and consumers, raising concerns over pricing power and regulatory oversight.
NIA said the unsolicited proposal runs counter to the provisions of the Public-Private Partnership (PPP) Code of the Philippines, specifically Section 10(a)(2), and its Implementing Rules and Regulations, particularly Section 54.
These regulations prohibit unsolicited proposals when a comparable project is already being developed through a solicited process or in partnership with another entity.
In a letter dated March 31, 2025, addressed to Aboitiz InfraCapital First Vice President Francis David M. Roque, NIA rejected the proposal on legal and strategic grounds.
The agency said the Aboitiz plan conflicts with its current agreement with the ADB, which already covers similar renewable energy and water infrastructure under the Jalaur River Multipurpose Project Phase II (JRMP II).
“This partnership is supported by a formal Transaction Advisory Service Agreement with the ADB, which includes renewable energy and water supply initiatives,” NIA administrator Engr. Eduardo Eddie G. Guillen stated.
“The Aboitiz proposal is not aligned with the NIA’s comprehensive development plan and may disrupt our obligations under the existing advisory agreement with the ADB,” the agency wrote.
NIA added it remains committed to pursuing its solicited proposal route, in line with national development goals and existing foreign-assisted project agreements.
The Jalaur River Multipurpose Project Phase II is one of Western Visayas’ flagship water security and irrigation programs, with significant ADB technical and financial backing.
Despite the rejection, NIA left the door open to future private sector collaborations that do not interfere with existing government-to-government or multilateral partnerships.
Aboitiz InfraCapital’s proposal to NIA is critical to its other proposal to the Iloilo City and Provincial governments to put up an Iloilo Bulk Water Supply Project under the Build-Own Operate (BOO) and Build-Lease (BL) contractual arrangements for the construction, operation, and maintenance of the bulk water supply.
The water supply project, valued at P8.45 billion, is expected to provide 80 million liters of potable treated water per day to Iloilo over a concession period of 33 years.
Under the BOO and BL scheme, Aboitiz would sell the treated bulk water to the implementing agencies — the city and provincial governments — which would then resell it to water distributors and third-party purchasers.
In September 2024, Atty. Frances Grace Parcon, chairperson of the Committee on Rules, Styles, and Justice at the Iloilo City Council, highlighted the risks involved in Aboitiz’s proposal, which includes a potential contract termination and fee imposition on the city government if water rights are not secured.
Parcon used that justification in rejecting Aboitiz InfraCapital Inc.’s request to authorize Mayor Jerry Treñas to sign a Letter of Intent (LOI) expressing the city government’s intention to secure water rights from the Jalaur River Multi-Purpose Project II (JRMP II).
Additionally, Aboitiz’s proposed rate of P51 per cubic meter is more than double the P22 per cubic meter currently charged by Metro Pacific Iloilo Water.
“Instead of benefiting consumers, this would burden them. We may have a large water supply, but it will be expensive,” Parcon said, noting that the proposal lacked necessary documentation./PN