China says Kaliwa Dam deal conforms to international practice

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THE CHINESE EMBASSY in Manila said Monday that the Kaliwa Dam project loan agreement is consistent with international practice and Philippine law, contrary to claims that it includes terms that are onerous for the Philippines.

“The loan agreement was reached by both sides through consultation on equal and voluntary basis,” the Embassy said in a statement.

“The terms and conditions of the agreement are general and standardized requirements in accordance with both international practice and Philippine laws,” it added, noting it had the approval of the Department of Finance (DoF) and the Department of Justice, among other government agencies.

The Kaliwa Dam project, which is expected to supply 600 million liters of water per day, is funded through a $211-million loan agreement between the Metropolitan Waterworks and Sewerage System and the Export-Import Bank of China. The loan deal was signed on Nov. 20, 2018.

“Once completed, the Kaliwa Dam project will fundamentally alleviate the severe challenge of the water shortage in Metro Manila,” the Embassy added.

“China will continue to work with the Philippines to ensure early implementation of the Kaliwa Dam Project for the benefit of the local people,” the Embassy added.

Deputy Minority Leader and Bayan Muna Rep. Carlos Isagani T. Zarate had earlier pointed out “onerous” provisions contained in the agreement, citing, among others, the waiver of sovereign immunity.

The agreement also had dispute-resolution terms such as the interpretation of the contract according to Chinese law and the designation of the Hong Kong International Arbitration Centre as the venue for hearing disputes.

The DoF later clarified these are standard provisions on loan agreements entered into by the Philippines. The Department noted that similar terms are contained in loan deals with Japan, South Korea, and France.

Malacañang has said that President Rodrigo R. Duterte is willing to review the agreement if onerous provisions are found. — Charmaine A. Tadalan