EXPLAINER: Mayor Rama opposes water rates hike decided by MCWD board, which ruling party Barug filled. But it's LWUA that OK's increase, not mayor or City Council. Mike, councilors may insist only on public hearing and pricing based on law.

SunStar File
SunStar File

WHAT RAMA, MCWD JUST DID. In separate but almost simultaneous announcements this week:

[] MCWD or Metropolitan Cebu Water District, through its board chairman Jose "Joey" Daluz III, said it will increase water rates by 60 percent in July next year, 2023, and another 10 percent in the succeeding year 2024, or a total of 70 percent.

[] Mayor Michael Rama of Cebu City, whose residents comprise more than 75 percent of MCWD consumers, opposed the move, asking it to reconsider and review its plans, calling the surge in price "unreasonable" to a public "still reeling from the crises" of pandemic and typhoons.

Last June 17, MCWD already leaked out the rates hike plan. John Macabinta of the water district's corporate planning department said it was "about to submit" the requirements to LWUA. (He wasn't too optimistic then on the margin of increase: he said they'd "likely get only P2 per cubic meter." In the unwrapped proposal, which was presented like an already done deal, the increase is reportedly "almost P10" per cbm.)

MCWD STRUCTURE. At first glance, the clash between the MCWD board's move and the mayor's reaction would seem odd, given that the board members had been appointed by Rama's predecessor and party-mate Edgardo Labella and were expected to cooperate with ruling Barug's policies.

MCWD's structure and allocation of power though won't encourage public perception of a board under the thumb of the appointing mayor. LWUA or Local Water Utilities Administration, through its board, approves appointment of MCWD directors, filling of vacancies in the board, and increase or reduction of rates.

LWUA'S AUTHORITY. A LWUA primer is specific about this: new water rates shall be implemented "only after they are presented in a public hearing and after review and approval by LWUA."

Councilor Jocelyn Pesquera confirmed to Explainer Friday, July 15, that the rates don't require approval from the Sanggunian. At the same time, former councilor Alvin Dizon, a vigorous and sober voice in past City Councils, said LWUA is "the final arbiter," but it "doesn't prevent the Sanggunian from coming up with a collective stand" on the question of rates. Dizon remembered that because of the absence of a public hearing, he opposed in 2015, during his second term, a water rate increase purportedly to fund a P4 billion pipeline expansion. (That increase apparently pushed through as MCWD now says the water district's last increase was in 2015 or seven years ago.)

MAYOR'S STANCE IN 2014. Occupying a highly political office and attuned to populist moves, Mayor Rama was expected to assume the stance of protecting the city's populace against "excessive burden."

The posture must be expected. It's not much different from what he took in May 2014 when MCWD proposed a mere 12 percent increase.

The MCWD manager then, Amando Paredes, asked that the City Council to cancel its scheduled public hearing as the water district would just hold a one-time "information dissemination" on the proposal. Rama, then on his second term as mayor (2010-2013; 2013-2016), supported the Sanggunian's rejection of the MCWD request, saying the increase must be explained in a confrontation with the public through its elected representatives.

RAMA'S POSITION NOW. Mayor Rama has called the 2023-2024 increase "abrupt and "unreasonable." By abrupt, he must see as sudden and unexpected the first increase after seven years of no increase. By unreasonable, he must see the increase only from the viewpoint of the suffering consumers, not from the lens of MCWD directors who understandably take the side of the company they're managing.

Rama opposes the MCWD move. Yet at the same time, he suggests a "staggered" implementation, extending the span by another year, from 2023 to 2025, which indicates he accepts the inevitability of the increase but he just wants less pain for consumer, which he thinks can be helped by explaining the increase at a public hearing.

Mayor Mike wants to spare his "constituents of any added unreasonable," he said, "especially in these trying times."

AMOUNT, PURPOSE OF INCREASE. From the current P15.20 per cubic meter (cu m) for the first 10 cubic meters consumed, the water rate will go up to P25.05, per cu m or an increase of P9.85 per cu m, starting July 2023.

MCWD said it has decided on the increase mainly to cover the cost of operations in the past years, having spent, it said, P14.1 billion "to sustain and upgrade operations since 2015." It claimed it has been "absorbing" the increase in operational expenses and cost of buying water.

The same primer says a water district's water rate is determined by these factors: "cost of systems expansion operation and maintenance cost." More lengthily: "cost of systems expansion, operation and maintenance cost, number of connections, debt service needs, 10% reserves, and operating efficiency."

COMPLAINTS AGAINST MCWD SERVICE, topped by alleged inadequate supply to existing consumers, most probably will occupy any public hearing on the proposal to increase rates.

Gripes of MCWD clients are mostly valid, but will they persuade decision makers to reject the proposed increase? MCWD might toss back the argument that its service could be inadequate because of low rates and deficient revenue and thus it wouldn't have enough resources to boost water supply. Circular and unproductive, yet that kind of talk is often heard in public discussions on the local water crisis and may crop up again at any new public hearing.


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