Thursday, March 06, 2008 Coop water utility proposed By Danilo Adorador III
CONVERTING the beleaguered Cagayan de Oro Water District (Cowd) into a cooperative will bail out the water utility from the woes plaguing it, the regional head of the Cooperative Development Authority (CDA) Northern Mindanao said.
CDA Northern Mindanao Director Orlando Ravanera said Cowd's becoming a cooperative is among the major concerns that the agency will raise to President Gloria Macapagal-Arroyo when she attends the Mindanao Cooperative Summit next week.
Cowd's over 70,000 concessionaires will benefit in terms of lower water bills, greater involvement on the company's decision-making process and even receive dividends once Cowd is turned into a cooperative.
"Once the water district is registered as a cooperative, its earnings and assets will be tax-free. This also translates to more empowered consumers, who should own and manage this basic necessity we call water," Ravanera told reporters during the Media Konek press forum sponsored by the Cagayan de Oro Press Club.
Surprisingly enough, there was no opposition from the Cowd.
In a separate interview, Cowd information officer Hans Bonotan said they would not oppose any juridical transition of the water district from a state-owned enterprise to a consumers' cooperative simply because it would not affect their day-to-day operations.
"I'm pretty sure all existing employees will be absorbed because we have done this before," Bonotan said, referring to the 1992 Supreme Court (SC) ruling transitioning Cowd into a government-owned and controlled corporation (GOCC) from being a quasi-private entity.
Cowd was created through Presidential Decree (PD) 198 in 1972, making it the first water district in the country outside of Metro Manila.
Councilor Ramon Tabor, chair of the cooperative committee at the City Council, voiced his own skepticism.
"We must look into the matter closely so as not to jeopardize the security of tenure of all employees," he said in a radio interview.
Tabor added that transforming Cowd into a cooperative would mean empowering the consumers more, as they would now be entitled to patronage refunds or dividends.
Bonotan also agreed that consumers by then would have more say in the decision-making process of the utility firm.
"Each member of the board of directors will then be elected by the consumers themselves," he said.
The mayor of Cagayan de Oro City currently appoints the Cowd board of directors.
Under a cooperative setting, Cowd's consumers would then compose the general assembly-the board and the management being only "subservient" to it.
Under the current corporate structure, the CDA official said Cowd is prone to political intervention, which often leads to corruption and poor services.
Lawyer Isidro Q. Lico, chairman of the Regional Development Cooperative Council, said the move has already gained grounds among the region's cooperatives.
"It's a practical thing to do in the sense that it redounds to consumer benefits," Lico said.
Proposing for the conversion of Cowd first came to light under a proposal presented before the City Council by local academic Anselmo Mercado.
Based on his feasibility study, Mercado said Cowd could rake in P98 millions in ten years or an increase in current earnings to as much as 42 percent if his proposal is green lighted.
The water utility has been dogged with controversies ranging from inefficiency, corruption and the P341 million tax obligations being levied by the Bureau of Internal Revenue (BIR) against it.
Last year, the tax agency has begun garnishing Cowd's assets, but has recently earned a reprieve when the issue was brought to court.
Cowd's management and its board of directors are also under fire from its own employees union over the bulk water supply agreement the water firm signed with a private water supplier.
The signed contract later turned out to be different from the model agreement - the difference being the leverage granted to Rio Verde Water Consortium to hike water rate as a protective measure against adverse market conditions. (With reports from Mark Francisco and Abigail Malalis)
