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CITY TO ACQUIRE $62.4 MILLION FOR SEWERAGE UPGRADE

16 September 2022 – The local government will be acquiring From the Asian Development Bank (ADB) some $62.4 million which is equivalent to more than P3.7 billion for the proposed 5-year rehabilitation of the old Baguio sewerage treatment plant.

City Budget Officer lawyer Leticia O. Clemente stated that the Baguio Resilient City Tourism Project (BRCTP) will be implemented in partnership with the ADB, the State-owned Tourism Infrastructure and Enterprise Zone Authority (TIEZA), the Department of Tourism (Dot) and the local government.

Under the said project, The ADB will serve as the funding agency, the TIEZA will be the executing and implementing agency for the construction of the sewage treatment plant, the DOT will be the implementing agency for the mandated training of tourism workers in the city while the local government will be the recipient of the projects.

However, she claimed that the city will provide staff and support to the concerned agencies in securing licenses, permits, ordinances to support an effective project implementation and provide land for the expanded sewerage treatment plant and cover the recurrent cost such as office, space, office operations, meeting cost, staff time and staff travel.

The city budget officer disclosed that the 5-year project implementation will involve preparation for the first 2 years, project construction for the next 2 years and start of operation and maintenance of the sewage treatment plant and Balili sewage network.

The deliverables for Output I will include new Balili sewage treatment plant, rehabilitated Balili sewage network and rehabilitated 11.3 kilometers of sewer lines while the deliverables for Output 2 will be solely confined in the improved productivity of tourism workers. The said project will support DOT to establish 12 private sector-led skills training networks in accommodation, food services, farm tourism, creative services, tour operations and transportation.

According to her, the project cost for Output 1 is approximately $50.6 million or P2.8 billion while Output 2 has a total project cost of $2.3 million or P132.8 billion aside from the projected contingencies amounting to $6.9 million or P384.1 million and financial charges during the implementation of the said project which is around $2.5 million or P144 million.

Of the $62.4 million or more than P3.7 billion loan, more than $61 million or P3.4 billion will be the proceeds from the ADB loan, $230,000 or P12.7 million will be the counterpart of TIEZA while the local government will be providing some $1.2 million or P68.9 million.

Celente stipulated that under the agreement, TIEZA will own the assets until the local government shall have fully reimbursed to the TIEZA the capital expenditures upon which will be the assets will be owned by the city.

Upon the project completion, the city is recommended to maintain and operate the sanitation infrastructure assets. It retains full responsibility for and undertakes the delivery of all sanitation services.

She revealed that the interest rate for the loan is 1.68 percent where the $61 million principal will become $71 million when repaid.

Moreover, the loan is payable on the 10th year from the date of grant. The loan is payable in 19 annual installments. The interest is computed based on diminishing balance. - Dexter A. See