Thursday, October 09, 2008 Water consumers getting ripped-off? By Cong B. Corrales
IS EVERY peso that water consumers in Cagayan de Oro pay worth it?
A study said for every P1 that each household pay for water bill, at least a quarter of it goes to perks -- bonuses, allowances, retirement benefits -- that officials of the Cagayan de Oro Water District (COWD) "illegally" granted themselves.
Conducted by the Technical Working Group (TWG) of the City Cooperative Development Council (CCDC), the study is based on the 2005 and 2006 audit reports of the Commission on Audit (COA).
The study noted that in 2005, COA declared the P130 million disbursements by COWD as "without legal basis", meaning the allocations were disallowed by existing laws.
In the succeeding year, the "illegal" appropriations slipped to P105 million.
The CDCC study estimated that for every P1 of water bill a consumer paid in 2005, 37 centavos was spent illegally, and 21.5 centavos in 2006.
Where did the money go?
According to state auditors, COWD officials, including its board of directors, are availing themselves of P4,500 per day in travel allowance, exceeding the P800 per day cap set on government officials.
For board of directors in government owned and operated entities, the allowed monetary benefit is set at P20,000 per month, or P240,000 annually.
In 2005 and 2006, COWD board of directors received P718,000 and P930,000 respectively.
These benefits include a year-end incentive bonus of P100,800, service incentive amounting to P84,000, anniversary productivity bonus of P33,600, grocery allowance of P30,000 and financial assistance of P20,000 for each member of the board.
At one time, COWD also gave an outgoing board member P720,000 as a golden parachute, the study said.
The local water firm also had the penchant to break procurement rules.
According to COA, COWD did not bid out materials worth some P23 million in 2005 and 2006.
COWD, too, is grappling with huge systems losses.
In 2005, unaccounted for water was at 43 percent. This figure rose to 46 percent the following year.
In two years, systems loss amounted to P41 million. Poorly constructed distribution system is being blamed for unaccounted for water.
And the water consumers bear the brunt for these losses because the water utility had to raise to P4 per cubic meter the original P2.11 rate for its own generated water. COWD also generates water from its bulk water agreement with Rio Verde, at a relatively higher price of P10.45 per cubic meter.
Isagani Daba, First Community Cooperative (FICCO) vice chair and head of the technical working group that conducted the study, said the water district remains profitable despite the "management" problem at the COWD.
According to COWD Acting General Manager Bienvenido Batar, the water firm netted an income of P50 million out of the total revenue of P490 million in 2006.
Daba said the figure translated to 10.2 centavos for every peso that concessionaires pay. He said the income could have been maximized more for consumers' benefit had COWD "not been bled dry because of mismanagement."
"These are clear proofs that as a public utility monopoly dealing in basic necessity, COWD is highly profitable," he added.
