AN OFFICIAL of the Cagayan de Oro City Water District (COWD) said the application of the city’s bulk water supplier for a rate increase has been turned down.
In a letter addressed to Bienvenido Santos, Rio Verde Water Consortium Inc. (RVWCI) president, Engineer Rachel Beja, COWD general manager, said the water district could only pay P10.45 per cubic meter because of legal constraints.
Rio Verde had asked for a rate hike saying the increase is necessary to fund the P60 million full rehabilitation of its damaged pipes which had been blamed for the service interruptions in the past weeks.
In a letter to the COWD signed by Engineer Joffrey Hapitan, RVWCI senior vice president for operations, Hapitan said RVWCI wants to hike the rate from P10.45 per cubic meter to P16.35 per cubic meter starting on Wednesday, November 1.
But Beja said they were surprised by the rate hike application since both the COWD and RVWCI are now currently working on a compromise agreement, and the matter is now pending with the Courts.
"We believe that you fully understand the reason why we cannot further implement the next two phases of our contract, including the possible water price adjustments as provided for in Article 9 of the Supplemental Agreement signed on 21 January 2005," she said.
She pointed out that the legal constraints, which include the Fraud Audit Report of the Commission on Audit (COA), the COA disallowances and now the nullification case pending with the Courts, are the reasons why the COWD is prohibited from implementing water price adjustments.
In its letter request for water price hike, Hapitan said that for more than 10 years, Rio Verde supplied bulk water to COWD on a purchase-order basis, as COWD consistently ignored and disavowed the Bulk Water Supply Agreement it entered into with Rio Verde.
With the COWD's recent public announcement that it is now financially capable of absorbing the P16.35 per cubic meter price, Hapitan said it is definitely unjustified for COWD to refuse "the long overdue, reasonable and necessary price increase being asked."
Hapitan also pointed out that Rio Verde has been experiencing financial difficulties for many years.
"The company has had to comply with several legislated wage increases and price increase of chemicals and operating supplies aside from many other legitimate expenses to maintain its facility in top shape which has unavoidably increased the cost of operations many times over," he said.
"It is reiterated that the financial debacle Rio Verde has been experiencing is worsened farther by the accidental damage recently to its underwater pipe crossing the Cagayan river, attributed to the combined forces of earthquakes and river flooding," he added.
Hapitan said that the "continued refusal to accept and heed Rio Verde's fair and reasonable request for price increase will unavoidably result to disruption and stoppage of bulk water supply to COWD."
City Councilor Teodulfo Lao Jr, said the committee on public utilities, which he chairs, will conduct another committee hearing next week, this time, to tackle the recent request of Rio Verde.
"We will tackle what is the reason nganung kalit lang naay ingon ato nga threat ang Rio Verde sa water district, kung nakastipulate ba sa contract na liberal ba ang pa-increase bisan naa pa ang matter sa Courts, things like these because we want to know their decision-making," he said.
"In the end, ang tawo ang magproblema kung padayon sila inganing ilang drama, we will certainly make a legal action if this gets ugly labina if the public suffers. They should be reminded that water is a basic human right," he added.