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Wednesday, September 24, 2003
MCWD water buy 'onerous, secret'
By Elias O. Baquero
With Jeanette P. Malinao
CEBU -- Employees of the Metropolitan Cebu Water District (MCWD) are urging general manager Dulce Abanilla to withdraw from a water supply contract MCWD entered into with a private company, saying it is questionable.
In a resolution, the employees’ union warned that the contract between MCWD and Foremost Water Resources Inc./Helpmate Inc. is disadvantageous to the government and Cebuano consumers.
Copies of the resolution were sent to the Office of the Ombudsman-Visayas and the Commission on Audit 7.
But MCWD board chairman Ruben Almendras assured that their contract with Foremost "to supply 4,000 cubic meters per day" will not lead to an increase in water rates.
Almendras also belied talks that MCWD "hid" the contract, which was signed in December last year yet, from the public.
He further said they were "happy" to get the price of P19 per cubic meter of water from Foremost because they are even buying desalinated water from Mactan at more than P19.
With the contract with Foremost, MCWD is also relieved of the burden of having to deal with a local government unit, which they would have to be more careful with, considering their experience with Compostela town.
Fair price
Foremost is sourcing its water from the southern Cebu town of Minglanilla.
A source said the MCWD originally pegged the buying rate at P14 per cubic meter because the total extraction cost is only P7 per cubic meter.
The same source said there were other companies that offered a much lower price but were disqualified from the bidding last Feb. 2, 2002 because they were not issued a clearance from the Minglanilla Municipal Government.
The price of P14 per cubic meter, though, was only the "variable cost," said Almendras. The amount does not yet include the interest MCWD will be paying for its capital and the local government unit’s share.
MCWD, he said, would have had to borrow money had it decided to undertake the project itself.
MCWD’s contract with Foremost will augment water supply in Metro Cebu, which is already short of 35,000 cubic meters, Almendras said.
An invitation to the contract bidding was published in Sun.Star and other newspapers, he added. Notices were also posted around Minglanilla.
But the MCWD Employees’ Union questioned the contract with Foremost, which was signed last Dec. 12, 2002.
Questions
The union said MCWD should have first looked into Foremost’s "competence, validity and desirability of corporate registration" in relation to MCWD’s franchise and permits.
It cited Presidential Decree 198 that "local water utilities should be locally controlled and managed, as well as have support from the national level in the area of technical advisory, services and financing."
"As a matter of law, this is impermissible. What cannot be done directly cannot likewise be done indirectly," the union said a separate letter dated Sept. 10, 2003, but received by Abanilla only Tuesday.
The price of P19 per cubic meter will result to P23,341.24 in daily losses or P8.52 million in losses per year, the union claimed.
"In other words, the government is subsidizing the private investors at the expense of people’s money," it added in the same letter.
Abanilla could not be contacted for comment Tuesday. She was in a meeting when Sun.Star visited her office.
Among the signatories of the resolution were union president Victor Chiong, vice president (internal) Norberto Tancinco Jr., vice president (external) Felicisimo Salgado, secretary Emelita Valizado, auditor Angelo Otero, public relations officer Raul Olivar, sergeant-at-arms Paulino Subingsubing and directors Artemio Alvarez, Raul Dacanaya and Hermilo Velez. Sun.Star Cebu
(September 24, 2003 issue)
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