BAGUIO CITY, Philippines (Asia Water Wire) - In this mountain resort town, a mining town during the U.S. colonial era, water has become such a precious commodity that one of the biggest gold mines here is switching from producing gold to water.

   Benguet Corp Inc. (BCI), among the biggest and earliest mining operators in this South-east Asian country, is closer to converting its open-cast mine into one giant water reservoir to service the needs of the 300,000 residents of this town, a popular tourist town for Filipinos escaping the summer heat in the lowlands.

   On Aug. 16, it was awarded a contract by the local water utility to undertake the bulk water project - amidst much controversy that continues today among environmentalists, consumer groups and the mayor of the city himself.

   The project, which cost almost 3 billion pesos (53.4 million dollars), would involve the delivery of about 50,000 cubic metres of treated water daily to Baguio, some 250 kilometres north of the Philippine capital. The water would be sourced from the Antamok River, which would then fill up the Benguet Corp reservoir. The area is located in Antamok village in Itogon town, about seven kilometres from the city proper, which also means that a pipeline would have to be constructed.

   The reservoir would be the old Grand Antamok Project, an open cast mine that operated for six years until its suspension in 1998 "due to uneconomic reasons", according to a Benguet Corp announcement.

   Benguet Corp said that it would convert the mined-out pit into a giant reservoir with a seven million cubic metre capacity, saying this not only meets water needs but is an ideal rehabilitation solution for the mined-out area. The project would have a duration of 25 years and can be renewed for 25 more years, and the company expects to start by the last quarter of 2005.

   "Aside from being a viable business undertaking, the bulk water project is a superior mine rehabilitation solution," Benguet said in announcing its notice of aware of the bulk water contract. "Instead of the original plan of back filling the (Antamok) open pit, the entire mining area will be re-engineered and converted to alternative land use. "

RIGHT WAY?

   But critics say the shortage of water in Baguio City - a long festering problem for years that peaks in summer when taps and toilets run dry – is not being addressed in the right and safe way.

   "The old mine site still contains heavy metals like lead, cadmium, magnesium and mercury," said Chie Valdez of theTongtongan ti Umili, a Baguio-based non government group.  "We have lost the right to safe and potable water."

   But Antonio Espiritu, the chairman of the Baguio Water District which awarded the project to BCI, says that the mining company would put up a testing station at the border of the city and Itogon town. "If the water is not safe, we can always refuse it. It is Benguet Corp's duty to bring us safe water," Espiritu said.

   Benguet Corp adds that rehabilitation of the Antamok gold mine is "the first time that a novel approach to mine rehabilitation and decommissioning is being applied to mined-out areas. This activity is a part of the company's commitment to corporate social responsibility and sustainable development."

   Residents of Itogon, meantime, say they should be the first priority of the project and want their livelihoods, displaced by the big mining activities, back.

   Frank Almoza, a youth leader of Loacan village in Itogon, said that their small-scale mining activities would be displaced by the reservoir. Almoza said that his forefathers had been mining the area for decades before Benguet and other mining corporations took over.

   "Now that they are finished with their mining, they should return the land to us," Almoza pointed out. Almoza and other members of Itogon Inter-Barangay (village) Alliance are calling for the cancellation of the 49 water permits issued by the National Water Resources Board to Benguet Corp.

   The Baguio Bulk Water Project was first bid out in 1996 but the eventual winner of the bid backed out because the Asia's currency crisis made its bid too low. Re-bidding began in 2002 and through the years of processing, all the bidders except for Benguet Corp were disqualified.

   In an Aug. 16 letter to Benguet Corp president Philip Romualdez, the Baguio Water District board said that "the company has been determined to have complied with the requirements of the bidding process and the terms of references."

WHOSE INTERESTS?

   But Baguio Mayor Braulio Yaranon, during the 1st Baguio Water Summit Aug. 18, asked the Baguio Water District Board to resign for kowtowing to Benguet Corp.

   "They are supposed to protect the interest of the Baguio consumers and not the interests of a private entity," Yaranon said. He said that the Baguio Water District and Benguet had not sufficiently eased residents' fears that the water is indeed safe and that the livelihoods of Itogon residents would not be left behind.

   More importantly, Yaranon said that the residents would be paying a very high price for the project.

   Espiritu projects that once the project delivers water, residents would pay 70 to 80 pesos (1.27 to 1.45 dollars) per cubic metre. The current price is a minimum of 225 pesos (4 dollars) for the first 10 cubic metres, or 22 .5 pesos (40 cents) a cubic metre - less than 30 percent of the figure Espiritu cites.

   "Why should we pay that much? Water is our right," insisted Chie Galvez, assistant secretary general of the non-government group Tongtongan ti Umili (which means 'Public Forum').

   The city's supply of water through the local water district is 35,000 cu m a day, against average demand of 52,000 cu m, forcing many households without water services to buy water from private truck-delivery services.

   For the past 30 years, most of the residents of Baguio City, which is only 52 square kilometres, have been receiving water three times a week, and only at certain hours. That is, if they get water at all, because the water district only services two-thirds of the population.

   It is undergoing a 500 million peso (8.9 million dollar) re-piping project so that all households would be serviced by the water district, and eventually by the Benguet project.

   But some remain skeptical about these efforts. "Why should we want to get water everyday when we're used to having it every other day at a much cheaper price?" argued city councillor Edilberto Tenefrancia.

   But other critics also find Mayor Yaranon's solution to the perennial water problem insufficient too, critics say, because he is calling for the digging of more wells from city aquifers.

   "It's my first time to hear someone say that the underground water source of Baguio is inexhaustible," said Aloysius Kato, board member of Benguet province, of which Baguio is the capital.

   During the 1st Baguio Water Summit in August, participants issued a water code that expressed concern about the protection of water sources and the need for the regulation of the drilling and excavation of deep wells. Other proposals included the imposition of a local environmental water user's fee, an environment monitoring report, creation of a water resources board and diversification of water access options through local water business permits.

   "We have to preserve our environment. We have to have a more efficient population and migration strategy," he said.

   Baguio's population has been growing because of urban migration at three percent a year and the city bursts at its seams with tourists during the summer months of March to May. (END/IPSAP/AWW/TR/JS/