NON-revenue water or unaccounted water incurred by the Cagayan de Oro Water District (COWD) can in part be attributed to the bulk water project, which the troubled water utility entered into in 2004 despite the poor state of its distribution system.

Engr. Bienvenido Batar, COWD assistant general manager, said the members of the board of directors who signed the December 2004 Bulk Water Supply Project had been forewarned of the water district’s deficiencies in distributing the new water supply from Bukidnon.

"The Manny Pacquiao Blog". Click here for stories and updates on the Filipino boxing champ.

This warning was ignored and, when the bulk water supply was implemented in 2007, non-revenue water shot up to 55 percent from 46 percent in the previous year, said Engr. Batar.

Batar said the incidents of leakages rose because COWD’s distribution facility was not fully prepared to take in the new water supply. This was the very reason, he said, why the management warned against any haste in the approval of the bulk water project.

Aside from leakage, non-revenue water is also blamed on pilferage, the prevalent water meter theft and the unreported consumption of water by firefighters.

Joel Baldelovar, chairman of COWD’s board of directors, had earlier cited the water district’s rising non-revenue water as a ground in having Batar replaced as acting general manager.

Baldelovar also accused Batar of insisting on increasing water rates by next year, instead of controlling COWD’s losses on unaccounted water.
Batar’s letter outlining the 2010 revenue budget of the water district over two months ago, however, belied this.

In the letter, Batar raised to the members of the board the nonattainment of COWD’s “desired level of water rates,” projected to be at P185 by 2008. This increase has been approved in the previous years, but consultations were held back in difference to the local government’ request.

Because of this, Batar proposed to the board to reactivate the withheld rate increase, with public consultations scheduled on the middle of the 2010 and to be given effect in last quarter of 2011.

This, he said, would enable the water utility to “maintain a desirable financial position,” noting that its over P700 million budget next year is no different from this year’s allocations.

Last year, the Commission on Audit issued a notice of disallowance to COWD over its payments to bulk water supplier Rio Verde Water Consortium Inc. (RVWCI) on the grounds that the project was awarded without legal basis in the first.

The 2004 signed contract is being investigated by the Ombudsman because of serious discrepancies in the original draft.

Among the major discrepancies:

* The insertion of a provision in the signed contract prohibiting the COWD to procure bulk water from suppliers other than Rio Verde;

* Diametrically opposed to the model contract, a provision in the signed contract allows RVWCI to sell its water to a third party;

* The signed contract allows rate hike retroactive to the date the request was first made.

Batar was replaced as acting manager by an interim appointee from the Local Water Utilities Administration last week. In a resolution addressed to LWUA, the board said Batar had "difficulty" dealing with its members.

Flow, COWD's labor union, attributed the move to replace Batar, a COWD veteran, to the latter's refusal to sign another water supply deal with RVWCI. (DVAIII)