Tuesday, August 21, 2007 MCWD says President can help solve water problem in Cebu by partial funding
A METROPOLITAN Cebu Water District (MCWD) official asked Malacañang to shoulder some costs involved in the Carmen bulk water supply project if it wants to help solve the water supply shortage in Metro Cebu.
Hopes for the implementation of the project were raised last February after President Arroyo asked her Cabinet members to intervene in the negotiations and help resolve issues between MCWD and the Ayala consortium.
Presidential Management Staff (PMS) Director General Cerge Remonde said he is not ruling out the possibility that Malacañang might help, especially since the President is aware of the water supply shortage and sees it as an obstacle to tourism projects expansion and other businesses.
But after being briefed about the background and the unresolved issues between MCWD and the Ayala consortium, Arroyo reportedly decided to leave it up to Metro Cebu local officials to settle the matter.
Remonde, also chairman of Malacañang’s infrastructure monitoring task force, said MCWD cannot unilaterally decide to drop the negotiations because other government agencies and foreign consultants who are involved also have to be consulted.
MCWD General Manager Armando Paredes said Malacañang has been trying to assist them with the negotiations, but he does not know what else Palace officials can do now that the board decided to terminate the negotiations with the consortium.
“Why don’t they shoulder the cost of the water rights transfer? If National Government finds the project to be very important then it should be willing to shoulder the cost of the transfer of the water permit, then we will proceed with the price challenge,” Paredes told Sun.Star Cebu.
He said he already proposed the matter to a PMS undersecretary earlier, but his suggestion was brushed aside.
Paredes raised the proposal after a lawyer privy to the negotiations between MCWD and the consortium challenged the water district board to allow the price challenge or the bidding on Ayala’s P2-billion water project to proceed.
The Ayala consortium is proposing to supply some 40,000 cubic meters of water a day to MCWD at P25.55 per cubic meter under a build-operate-transfer scheme.
The water will be sourced from Carmen town in northern Cebu. MCWD decided to terminate negotiations on the terms of reference for the price challenge after both parties failed to reach an acceptable amount on the cost of the water permit transfer.
The consortium asked to be reimbursed some P50 million for their water permit but the water district was willing to pay only up to P100,000.
“I’m not ruling out the possibility of investing P50 million if that can solve the problem. I can bring it up to the President but we need a formal request from MCWD on that. Also, MCWD cannot unilaterally make a decision to terminate the negotiations without consulting the other agencies involved,” Remonde told Sun.Star Cebu.
The lawyer, who requested anonymity, warned that MCWD’s decision to end the negotiations could result in various lawsuits, which Ayala may file against the water district.
Manila Water Inc. Chief Finance Officer Sherisa Nuesa earlier said they are just waiting for a formal notice from MCWD so they can refer it to their lawyers for review, if the developments will not violate the BOT Law.
Nuesa said in an earlier interview that they expected that the unresolved issue on the water permit cost will be endorsed to the National Water Resources Board (NWRB).
“There was already an agreement that they will let NWRB determine the amount. Why don’t they just let NWRB handle it, anyway it will decide on what it thinks is the value of the water permit, and not on what Ayala’s or MCWD’s proposed amount is... If it is true that they decided to terminate the deal, I am sure Ayala will not take it sitting down,” the source said.
The lawyer also said that MCWD should allow the price challenge to proceed because it already entered into the bulk water supply agreement with the consortium. (LCR)
