Wednesday, April 23, 2008 Coop mulls filing cases vs COWD officials By Bencyrus Ellorin Contributor
A LEGAL team from the cooperative sector is now studying what cases can be filed against responsible officials in the Cagayan de Oro Water District (COWD) based on the 2005 Commission on Audit (COA) report which found many alleged anomalous transactions in the said water utility.
A study conducted by the Northern Mindanao Regional Cooperative Development Council concluded that if the financially-beleaguered COWD is cooperativized, the profitability rate of the said utility will increase from 4.5 percent to 42 percent.
The cash flow of the COWD, the study revealed, would "be turned from negative P7.4-million to P123.5-million," said Dr. Anselmo Mercado, president of the Cooperative Business Institute and leader of the group that studied the economic, financial and business viability of cooperativizing the COWD.
He presented the result of their study in the Regular Meeting of the council recently.
The study concluded that, "if coops, as a group, will take over COWD operations and really be a genuine coop, it looks a very viable profitable enterprise. The basis of this - if the questioned disbursements for 2005 are restored, the profitability rate of COWD would increase from 4.5 percent to 42 percent. The cash flow would have turned from negative P7.4 million to positive P123.5 million."
The questioned disbursements, the study was referring to, are being reflected on the 2005 Commission on Audit (COA) report on the COWD.
The cash-strapped COWD has liabilities totaling to P1.2-billion. The study however said, "If perks (i.e., board honoraria & per diems) are cut down to minimum allowed by law, loan amortizations can be paid."
The study also looked into the organizational structure and means of capitalizing the COWD if it is cooperativized.
Ownership of the COWD once cooperativized will be transferred to the more than 70,000 individual user-members who can exercise more democratic control over the utility that is now technically a government-owned and controlled corporation (GOCC).
Although a GOCC, the study observed that the government has not invested much hard currency except the loan granted/guaranteed by Local Water Utilities Authority (LWUA).
A team of experts composed of engineers and water experts has started the technical study to review the operation of the COWD and propose ways to improve its service.
A group of lawyers commissioned by the Regional Cooperative Development Council is also looking at the legal aspect of "converting the COWD into a cooperative."
"We need to be thorough and scientific in our approach to this very noble project," said Atty. Isidro Lico, chairperson of the council.
The Council has took interest into the possibility of cooperativizing the COWD after strong clamor from Cagayan de Oro-based cooperatives on its poor service, absence in rural areas and high water rates was raised before it. The technical working group was organized to look into the issue was formed by the council's issue and policy advocacy committee in December 2007.
