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Monday, August 20, 2007
Cebu water district seeks new suppliers
By Linette C. Ramos
CEBU CITY -- After almost a decade of negotiations with the Ayala consortium, the Metropolitan Cebu Water District (MCWD) shifts focus to its own development projects for additional water supply.
Ayala’s Carmen bulk water supply project proposal, which MCWD decided to turn down last week, would have supplied up to 40,000 cubic meters of water a day.
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The MCWD board decided not to pursue negotiations, saying it was already impossible to reach a mutually acceptable amount for the cost of water rights transfer.
Its decision to stop dealing with Ayala for the P2-billion Carmen project surprised the company, which will have the move reviewed by its lawyers to see if it did not violate the Build, Operate and Transfer (BOT) Law.
In a telephone interview with Sun.Star Sunday, MCWD General Manager Armando Paredes said they can now conduct an open bidding on pending proposals from other bulk water suppliers.
The water district will also focus on rehabilitating and operating deep and shallow wells in Compostela town and in Mactan Island to avoid a water shortage in Metro Cebu.
“We will now reevaluate the need for additional supply and check how much water we need. We have our own development projects and small bulk water supply proposals that we can bid out anytime,” Paredes said.
He admitted that the volume of water that MCWD can source from other suppliers will not be as huge as that being offered by Ayala.
“(But) we don’t see any way where we can agree on the amount for the cost of the transfer of the water rights. The discrepancy is so wide. Ayala is asking for P80 million and MCWD is only willing to reimburse up to P100,000,” Paredes added.
The development surprised some representatives of Manila Water, the Ayala Corp. subsidiary that would have run the Carmen water supply project.
Cherisa Nuesa, Manila Water’s chief finance officer, said they have yet to receive a formal notice from the MCWD on the negotiation’s cancellation.
She said they have consistently complied with all of MCWD’s requirements and that of other government agencies involved in the proposal.
Just recently, she said, they met the 15-day deadline that MCWD imposed for them to come up with a reasonable cost for the water rights transfer, and informed the National Water Resources Board (NWRB) about it, as required.
Nuesa said that once she receives the notice, they will refer it to their lawyers for review.
“We have already written MCWD and the NWRB informing them that we agreed to endorse the issue on the water rights transfer cost to NWRB,” she told Sun.Star Cebu.
“Our negotiations have reached a level where the initialed contract has already been approved by Neda. We will discuss it with our lawyers because as far as we are concerned, we have complied with all the deadlines,” she added.
MCWD and the Ayala consortium started negotiating for the project in the 1990s yet, but the National Economic and Development Authority granted its first-pass approval only last year.
Both parties, however, failed to agree on the Ayala consortium’s demand to be refunded of close to P150 million in project development costs if it loses to other bidders during the Swiss challenge.
Last June, Ayala and MCWD decided that instead of a project development cost, the consortium will only be reimbursed for expenses on the transfer of the water permit, which gave the consortium exclusivity to source water from Carmen town’s Luyan River.
In a separate interview, Cebu City Councilor Sylvan Jakosalem welcomed MCWD’s recent decision, as this would allow other suppliers to sell the district water at a lower price.
“I am sure that this will result in cheaper water for Cebu in the future. Ayala’s unsolicited proposal for the Carmen water project had taken too much valuable time as MCWD could not entertain other proposals until the Ayala project was resolved,” said the council committee on energy, transportation, communication, and other utilities chairman. (Sun.Star Cebu)
For more Philippine news, visit Sun.Star Manila. (August 20, 2007 issue)
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