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Wednesday, August 02, 2006
Garnished P19M in banks to drain resources
Officials of the Metropolitan Cebu Water District (MCWD) yesterday said their funds garnished by the court now amount to P19 million and could reach a point that even the utility firm’s operational funds could be affected.
The funds garnished are P14 million in Land Bank and of the Philippines and P5 million in seven other collection agent-banks.
MCWD general manager Armando Paredes yesterday said that if the funds at their collecting banks keep on increasing, more MCWD funds will be tied up and it could reach a point when no more money can be used for day-to-day operations and payment of salaries and allowances may be stopped.
Lately, Paredes said they set aside requests for acquisition of supplies and shelved some projects by administration or projects undertaken by MCWD.
“Funding for MCWD’s operations has suffered, as well as its payment to its suppliers,” said Paredes, who described the garnishment as Mactan Rock’s as a “hostage tactic.”
MCWD can still access its funds at Land Bank in excess of the garnished P14 million, but the water district’s money in the seven collecting banks are all untouchable because the garnishment did not specify an amount.
Garnishment is a court order to a company or entity to withhold all or part of its money and send the garnished sum to the person or organization that won a lawsuit over the former.
The garnishment arose from the writ of execution on the order of Construction Industry Arbitration Commission (Ciac), which directed MCWD to pay Mactan Rock foreign exchange recovery costs, which reached P18 million.
Mactan Rock had filed a complaint before the Ciac after MCWD’s first attempt to collect penalties for delivery shortage from1999 to 2001, which amounted to P2.8 million then.
In a press conference, Paredes said Mactan Rock has a 10-year water supply contract with MCWD, which will expire in 2008.
It is required to supply MCWD 5,000 cubic meters per day in the fourth to 10th year.
Under the contract that a penalty of P9.28 per cu.m. shall be imposed on Mactan Rock in case of short delivery. Mactan Rock’s supply was short since its first delivery in 1999 and, as of June 21, 2006, the total penalty ballooned to P14,397,787.80.
After MCWD demanded the payment of short delivery penalties last June, Mactan Rock president Antonio Tompar warned he would shut down the firm’s operations, which will result in loss of water in Cordova town and shortage in Lapu-Lapu City.
The shutdown was averted after Paredes offered a compromise deal to Mactan Rock.
Tompar has also filed a complaint with the MCWD board against management practices of the utility firm.
MCWD had filed a motion to dismiss the case, saying Ciac has no jurisdiction over the dispute. But Ciac ruled in Mactan Rock’s favor, prompting MCWD to go to the Court of Appeals, which sustained Ciac’s decision.
MCWD was able to secure a status quo order, but the garnishment of MCWD accounts remains in effect. (EOB)
For Bisaya stories from Cebu. Click here. (August 2, 2006 issue)
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