The Casecnan multi-purpose irrigation and power project (CMIPP) was completed in 2001 under a 25-year build-operate-transfer agreement between the government and the California Energy-Casecnan Water and Energy Co. Inc. (CE-CWEC).
The structures, located in Nueva Vizcaya, include two impounding dams that divert water from two rivers in Nueva Vizcaya and a pair of 6m tunnels that drive water to a power plant in Pantabangan town in Nueva Ecija, 27km away.
However, since the start of its operation in October 2001, CE-CWEC has not paid the local governments of Nueva Vizcaya province and Alfonso Casta town the required real property taxes, computed yearly at 2% of the entire value of the property.
In earlier interviews, CE-CWEC officials invoked a term in its agreement with the Department of Finance and the National Irrigation Administration that CE-CWEC is not supposed to pay taxes unless told to do so by both agencies. The owners also claim that the project was exempt from tax obligations, as part of the tax incentives granted to independent power producers by the government to attract investments to solve the power crisis in the early 1990s.