OceanaGold Phils.

Inc – CSR Project

25-Year Plan for the Establishment, Financing, and
Project of Level III Water Supply Services in
Barangay Didipio, Kasibu Nueva Viscaya

TECHNICAL SPECIFICATION

1.1 BACKGROUND

The effective and reliable delivery of safe and potable water supply and service is
fundamental to municipal development and socioeconomic growth. Access to dependable
and treated water makes a dramatic impact on health and hygiene, productivity, and local
economic development, and directly affects agriculture and other industry. On the other
hand, the relative scarcity or finiteness of water, even when viewed in context of the
Philippines’ abundance in freshwater resources, implies the necessary roles of government
institutions, public and private water service providers (WSPs) and operators, and
communities alike, inregulating, managing, preserving, harnessing, and sustaining the
conveyance of water as a public and economic good across all users of present and
forthcoming generations.

In the Philippines, the pervasive, institutional fragmentation of the water supply sector
reflects the archipelagic composition, and staggereddevelopment in the regions, provinces,
and municipalities. Whereas there is an inefficient number of government agencies engaged
in water regulation, oversight, financing, and development, today there are nearly 25,000
WSPs of various constitutions, forms, and sizesthat are responsible for the delivery of Level
I, Level II and Level III water supply to households and consumers of all income classes and
categories. For Level III water supply characterized by piped-in and individually-metered
water systems, this subsector is dominated by organized water utilities such as water
districts (WD), locally-run government utilities and waterworks, barangay and rural water
associations (WASAs), cooperatives, and private operators such as Balibago Waterworks
System, Inc.

The case of Barangay Didipio in the Municipality of Kasibu, a fourth class municipality in the
province of Nueva Vizcaya, is gradually emerging into a very progressive barangay with a
viable economy. The population rate for every 4 consecutive years as stated in the historical
records of the PSA are 3.41%, 2.59%, 6.20%, -0.51% and 8.90% indicates that the
population is gradually increasing. The increase in population also increases the demand in
the accessibility of potable water within the barangay.

1-1|P a g e Section 1.0 Introduction

OceanaGold Phils. Inc – CSR Project
25-Year Plan for the Establishment, Financing, and
Project of Level III Water Supply Services in
Barangay Didipio, Kasibu Nueva Viscaya

At present, the Barangay Didipio is largely considered a Greenfield – an area that has no
organized, Level III water system – wherein majority of the citizens and residents source
their own water outside the formal grid by using whatever convenient or accessible methods,
or by using costly substitutes to access potable water supply. Most of the rural and upland
areas in Barangay Didipio heretofore source water through natural springs, shallow and
public wells, hand pumps, Creeksand Rivers, etc. A primary downside to these is that such
sources do not benefit from any proper treatment, disinfection, and maintenance, thus
raising the vulnerabilities of consumers who take from these point- and communal-sources.

Alternatively, in likely urbanizing Puroks such as boulevard, residents obtain their water
mainly from refilling station that cost 100% more on average, per month, compared against
minimum costs set by many WDs and operators. Retailers and refilling distributors capitalize
on the emerging rural and peri-rural populace of Barangay Didipio, and the corollary
opportunity to fill in increasing water requirements of the LGU. All these suggest that the
water supply conditions in barangay Didipio require significant reorganization, planning and
financial support if the LGU expects to provide high-caliber water service that can match
current and future water demand.

In line with this, the present water situation in Didipio indicates that those having a point
source (Level I) is approximately 1% (5 out of 780 HH) of the total households only. And
sometimes the water is unsafe for drinking due to its water quality and odor.

OGPI decided to identify possible solutions regarding issues in water quality, reliability and
availability, network distribution and safety. The project includes a comprehensive review of
existing and potential water sources, socioeconomic dimensions, the development of
alternative solutions and options, and a recommended development plan. The technical and
the financial were determined using a thorough demand-supply gap analysis, and adopting
consumer projections generated for barangay Didipio.

It is in this light that OGPI expresses its profound interest to commit with the Local
Government of Barangay Didipio through an assignment of Company Social Responsibility
in response to the outstanding demand for an upgraded and organized Level III waterworks
in the LGU. The proposal for the project is called “25-Year plan for the Improvement &
Development of Water Supply Services in Barangay Didipio”.

1-2|P a g e Section 1.0 Introduction

OceanaGold Phils. Inc – CSR Project
25-Year Plan for the Establishment, Financing, and
Project of Level III Water Supply Services in
Barangay Didipio, Kasibu Nueva Viscaya

1.1.1 Project Concept & Context

The project aims to establish a comprehensive, dependable, safe potable level III
water service system to the barangay Didipio. Figure 1 below shows the ordinary
schematic diagram for a level III water service system.

Figure 1 Level III service connection schematic diagram

As shown on figure 1, under level III service and operations, raw water flows to raw
water transmission line (T.L.) connected to a pump (if necessary) going to the Water
Treatment Plant (WTP) where raw water is properly treated and disinfected to meet
the Philippine National Standard for Drinking Water (PNSDW) parameters.
Processed, treated water then flows to the treated water transmission line (T.L.)
connected to a pump (if necessary), and stored to the reservoir (treated water
storage or product tank). From this storage, product water is conveyed to the
transmission main, the distribution and sub-distribution lines for consumption of the
consumers.

1.1.2 Objectives

It is OGPI’s vision, through its subsidiaries like Didipio, to champion Didipio’s growth
and urbanizing development in communities through the provision of high-
caliberwater (Level III) and sanitary services. Subsequently, the objectives of the 25
year Plan for the Improvement and Development of Water Supply Service in
Barangay Didipio are in consonance with these metrics:

1-3|P a g e Section 1.0 Introduction

OceanaGold Phils. Inc – CSR Project
25-Year Plan for the Establishment, Financing, and
Project of Level III Water Supply Services in
Barangay Didipio, Kasibu Nueva Viscaya

 Alleviate waterlessness among lower-income, unserved, and rural

households;
 Expansion and saturation of service coverage for at least 99% of service
area. And that the water supply is safe for consumption and available 24/7
with enough pressure of 16 psi at minimum per household;
 Improve the lives of the community by providing the water needs of each
family initially and to all targeted households and commercial
establishments within its service area;
 Ensure demand-driven response to encourage inclusive and sustainable
service provision;
 Establish an integrated (or looped) level III water distribution system that
can be utilized by the present and future residents of the town by
considering an environmentally inclined approach and to comply with all
the existing local and national laws and regulations relevant to water
supply, with due consideration and application of basic sanitation and
treatment;
 Institutionalize improvements in billings and collection, cost recovery-tariffs,
and asset management and maintenance;
 Augment long-run water security by developing potential water resources.

Background and Information

OceanaGold evolved out of the gold-production assets of Gold and Resource
Developments Limited in 2003 with a diverse portfolio of assets in the South Island
of New Zealand. In 2006, OceanaGold acquired the Didipio Project in the Philippines
through the merger with Climax Mining. In 2015, OceanaGold expanded its footprint
in New Zealand with the acquisition of the Waihi Gold Mine in the North Island as
well as took ownership of the Haile Gold Mine through the takeover of Romarco
Minerals Inc. OceanaGold also made a strategic investment in TSXV-listed Gold
Standard Ventures.
OceanaGold (OGC), through its commitments to making positive contributors to the
social, economic and institutional development of the communities in which to aims
to build community capacity and self determination and to support community health
and safety initiatives, education and training opportunities, local employment and the
establishment and growth of independent business opportunity.

1-4|P a g e Section 1.0 Introduction

OceanaGold Phils. Inc – CSR Project
25-Year Plan for the Establishment, Financing, and
Project of Level III Water Supply Services in
Barangay Didipio, Kasibu Nueva Viscaya

Our strategic objectives:

 Effective common OceanaGold framework
 Injury-free, healthy work environments without fatalities
 Recognised for responsible environmental management
 Demonstrated and positive social responsibilities with communities
 Established positive government relationships that enable company activities
 Realise the potential of our people to build a high-performance organisation
 Maximise value from our mineral resources, plant and equipment
 Value enhancement through cost management and continuous improvement
processes
 Ensure a pipeline of quality projects to deliver growth in shareholder returns

Our Vision
We have an unwavering focus on the health and safety of our people, the wellbeing
of our local communities and an unrelenting commitment to uphold the highest
standards in environmental and sustainability practices.
Our Values
Our values shape our culture and define the character of our company. They serve
as a guide for how we behave and make decisions.

The Barangay Didipio in the Municipality of Kasibu, a fourth class municipality in the
province of Nueva Vizcaya, is gradually emerging into a very progressive barangay
with a viable economy. The population rate for every 4 consecutive years as stated in
the historical records of the PSA are 3.41%, 2.59%, 6.20%, -0.51% and 8.90%
indicates that the population is gradually increasing. The increase in population also
increases the demand in the accessibility of potable water within the barangay.

The present water situation in Didipio indicates that those having a point source
(Level I) is approximately 1% (5 out of 780 HH) of the total households only. And
sometimes the water is unsafe for drinking due to its water quality and odor.

1-5|P a g e Section 1.0 Introduction

OceanaGold Phils. Inc – CSR Project
25-Year Plan for the Establishment, Financing, and
Project of Level III Water Supply Services in
Barangay Didipio, Kasibu Nueva Viscaya

OGPI decided to identify possible solutions regarding issues in water quality,

reliability and availability, network distribution and safety. The project includes a
comprehensive review of existing and potential water sources, socioeconomic
dimensions, the development of alternative solutions and options, and a
recommended development plan. The technical and the financial were determined
using a thorough demand-supply gap analysis, and adopting consumer projections
generated for barangay Didipio.

1-6|P a g e Section 1.0 Introduction