THE Cebu Provincial Government will start accepting offers from companies that wish to develop the bulk water supply from Luyang River in the northern town of Carmen following the termination of its contract with Manila Water Consortium Inc. (MWCI).
Gov. Gwendolyn Garcia invited Palawan Gov. Jose Alvarez to look into the prospect of developing Luyang River after the Capitol issued the notice of termination to Manila Water on Wednesday, Dec. 11, 2019.
Sugbo News on Saturday, Dec. 14, reported that Alvarez is interested in augmenting the 35 million liters produced daily by the Luyang River.
“I will look at it favorably because as of now, this project of the Province is only 35,000 cubic meters (cu. m.). I’m proposing to the governor to supply another 100,000 cu. m. from the north and another 100,000 cu. m. from the south,” he said.
Alvarez, though, did not specify which areas of Luyang River will be ideal for tapping additional bulk water.
He said that what should be prioritized is ensuring that all households in the province have access to safe water.
“This project all depends on the economy. If your investment can make money, then why not? But we’re also interested to assist the governor in providing all the water systems for all the more than 1,000 barangays in Cebu (province) because we’ve done that in Palawan,” Alvarez said.
In a 2011 report, the other companies that joined the bidding for the bulk water project were Maynilad Water Services Inc. and Cebu Bulk Water Resources Inc. (CBWRI), which is headed by Alvarez.
Maynilad’s bid of P18.71 per cu. m. without the value added tax (VAT) was deemed too high.
It had a project internal rate of return (PIRR) of 14.51 percent. Manila Water, on the other hand, offered P24.90 per cu. m. of water tariff with a PIRR of 14.5 percent.
CBWRI had the lowest water tariff at P13.95 per cu. m., including VAT, with a PIRR of 19.26 percent. Under the Swiss challenge, the original proponent was given a chance to match the bid of its challenger.
Manila Water challenged the top bidder, CBWRI, at the same tariff of P13.95 (inclusive of the VAT) and with an income retudrn rate of 19.26 percent, too.
On March 21, 2012, during Garcia’s earlier stint as governor, the Capitol entered into a joint investment agreement (JIA) with Manila Water to manage the bulk water supply.
The JIA led to the creation of Cebu Water, a joint investment company, for the construction and development of water supply facilities that would deliver treated bulk water.
The JIA provided an option to engage in retail supply in certain areas and to some areas in the province by tapping the surface water source of the Luyang River.
In 2014, the P1.1 billion water supply project started producing 35 million liters of water daily for homes in Metro Cebu.
The water produced by the Carmen facility was sold to the Metropolitan Cebu Water District (MCWD).
Cebu Water and MCWD have a 20-year supply agreement. / RTF