Atlas’ subsidiary defers P3-B water project in Metro Cebu

October 11, 2009 - Aquatlas Inc., a subsidiary of listed Atlas Consolidated Mining and Development Corp., has put on hold its P3-billion project to supply bulk water to the southern portion of Metro Cebu, pending the decision by the provincial government.

“We are on a holding pattern right now [and] implementation is being held back. At this point, they are still not ready to accept our water supply,” Aquatlas vice president Almario Balce said in a telephone interview on Friday.

The executive explained that the provincial government has decided to prioritize the water supply projects to areas north of Metro Cebu, where Ayala-led Manila Water Co. Inc. has plans to service in a separate deal.

“The management of Metropolitan Cebu Water District said that there is more demand in the north than in the south,” said Balce. He said another problem is the water distribution system in Metro Cebu, meaning the new supply will be wasted unless it can be channeled efficiently.

Last month, the Cebu government accepted the unsolicited proposal of Manila Water and partner Stateland Inc, to build a P2-billion bulk water facility seen to plug supply deficiencies in the area. The project is said to supply Cebu cities and municipalities namely Danao, Compostela, Liloan, Consolacion, Mandaue, Lapu Lapu and Cordova.

Manila Water said that after detailed negotiations with the Cebu government, the deal shall be subjected to a “Swiss challenge” or a competitive challenge from other parties.

Meanwhile, Aquatlas earlier planned to build a facility which can deliver up to 100,000 cubic meters of water per day to Southern Metro Cebu and nearby Toledo, where parent company Atlas operates a copper mine.

Balce said the company may opt to build the facility, which will take two years to complete, to supply the water requirements of the growing mining activities of Atlas. In a disclosure of Friday, Atlas said it completed its 10th copper shipment from the Toledo mine valued at almost P1.7 billion.

The concentrates which approximately contain 28.28-percent copper, 3.00 grams/dry metric ton (DMT) gold and 28.74 grams/DMT silver were shipped to Qingdao, China.

“We are always keen on the water supply project, but we haven’t started yet,” said Balce, noting that the firm remains optimistic despite the delay as water supply is considered a perennial problem in the island. “It’s really a timing question.”

The bulk water proposal is part of the P6-billion project which also includes a hydropower component. Balce disclosed that Aquatlas is still looking for a technical foreign partner and is in talks with Chinese and Japanese groups. He declined to elaborate.

He said the feasibility study for the P3-billion power project will be completed this year, and construction may begin by mid-2010 with operation seen in three years. (businessmirror)

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