Water supplier asks City Hall to let it sell water to MCWD

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Sunday, April 27, 2014


THE supplier of potable water in the South Road Properties (SRP) wants the Cebu City Government to allow them to sell their water to the Metropolitan Cebu Water District (MCWD).

This way, they can pay for the loan they took out to establish their water plant in the SRP, amounting to P500 million, as well as the interest that amounts to P3.5 million per month.

Based on their joint venture agreement with the City on May 28, 2010, the Pilipinas Water Resource Inc. (PWRI) is responsible for the supply of potable water to all the locators in the SRP. It will also collect and process their waste water. The P500-million project of the PWRI covers the expansion of supply from 550 cubic meters of potable water per day to 20,000 cubic meters per day. It is also supposed to upgrade the wastewater treatment facility’s capacity from 2,000 to 8,400 cubic meters per day, and procure and install pipes for the potable, non-potable and waste water systems.

The project stared in May 2011 and was completed in June 2013.

In a letter to Mayor Michael Rama, PWRI President Atty. Anthony Vincent Sotto and Vice President Engr. Edgar Sibonga said they have not yet generated revenues at the SRP almost a year after they finished the project.

Sotto and Sibonga said that SM Prime Holdings and PWRI signed an agreement on April
29, 2011 for their company to supply processed water, at an initial volume of 1,000 cubic meters per day but expandable to 10,000 cubic meters per day.

The agreement, they said, was supposed to commence in the second quarter of 2013.

“However, SM failed to operate on the above-stated schedule for reasons we are not aware of and rather moved the date to September 2015,” they said.

“There is a desperate need for PWRI to generate revenues, especially now that our plant and the pipes are in place and the payments for the interest and the principal of our loans are in effect,” they said.

When SM signed its deal with the City in 2010 for the purchase of 30-hectare lot at SRP, they had targeted that by 2012, the SRP will be home to the biggest shopping mall in the Visayas and Mindanao, with a gross floor area of 25 hectares.

SRP Management Office head Roberto Varquez said yesterday, though, that SM’s project will be completed next year yet.

Asked about PWRI’s plan to sell water to MCWD, Varquez said he has not yet heard about it.

Because they were not able to generate revenues, Sotto and Sibonga said that PWRI sat down with the bank that granted their loan.

“The only help they can offer to us is the deferment of payment for the principal but not the payment of the interest, which is about P3.5 million per month,” they added.

Sotto and Sibonga asked the City to allow PWRI to sell water to MCWD for an initial volume of 10,000 cubic meters per day, which can then be raised to 20,000 cubic meters per day.

They said that this will generate revenue of P18 million per year and help MCWD meet its water demand.

They asked the mayor to amend the joint venture agreement.

Sotto and Sibonga assured the City, though, that their priority is still to meet the water needs of the SRP locators first.

They pointed out that their plant can generate more than 20,000 cubic meters per day of water, expandable to 35,000. The sale of PWRI’s 10,000 cubic meters of water per day to MCWD will not affect their commitment to meet the water needs of the SRP, they assured.

Sotto and Sibonga told the mayor that they will be willing to sit down with City Hall officials to discuss their proposal.

A copy of PWRI’s letter was also furnished to the City Council. During their April 23 session, the council scheduled an executive session on June 4 with PWRI to discuss their proposal.

Published in the Sun.Star Cebu newspaper on April 28, 2014.

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