Lawyer: Oro water district acted without due diligence

LAWYER James Judith is accusing officials of the Cagayan de Oro Water District (COWD) of not exercising due diligence before signing a joint venture agreement with a new treated bulk water supplier to the detriment of consumers.

Judith said the COWD may have acted rashly when it entered into an agreement with MetroPac Water Investments Corporation (MetroPac) for the supply of 100,000 cubic meters per day without ascertaining where its new bulk water supplier will source its water.

Judith said COWD officials may have inadvertently allowed the formation of a water cartel that may eventually dictate the amount consumers would have to shell out every month for clean tap water.

Judith had earlier said that MetroPac and Rio Verde Water Consortium, Inc. (RVWCI) may have violated Republic Act No. 10667 or the Philippine Competition Act signed into law by former President Benigno Aquino III on July 21, 2015.

The law prohibits “anti-competitive agreements, abuses of dominant positions, and mergers and acquisitions that limit, prevent, and restrict competition” which can be detrimental to consumers.

The law established the quasi-judicial Philippine Competition Commission (PCC) which is tasked to ensure efficient and fair market competition among businesses engaged in trade, industry, and all commercial economic activities.

Judith said he, along with city councilors Teodulfo Lao, chairman of the City Council’s committee on public utilities, and committee members Eric Salcedo and Reuben Roa Daba, will file a complaint at the PCC regarding the alleged "anti-competitive" against the two bulk water suppliers anytime soon.

An official of the COWD, meanwhile, on Monday, November 13, said the water utility still has “no idea” where MetroPac will source the 100,000 cubic meters per day that it has agreed to supply COWD.

COWD general manager Engineer Rachel Beja said she sent a letter last October 31 to MetroPac three months after both signed a joint venture agreement because the COWD needs to know whether the firm would construct its own treatment plant, purchase bulk water from an existing water treatment plant, or purchase RVWCI.

Beja said MetroPac, as agreed, should have began supplying bulk water 2 months after the agreement was signed.

The joint venture agreement was signed last August 15.

"So nagsulat mi kung asa sa 3 options ang iyang gamiton sa MetroPac para maka-supply kay 2 months mi nagsign sa agreement, magsupply na baya sila, so proper time na makabalo ang water district kung asa magkuha ug tubig kay wala may official communication kung asa magkuha gyud (We already wrote to them if which among the 3 options they would undertake to supply water, because supposedly 2 months after the agreement was signed, they shall start supplying. And there has been no official communication as to where they would source it)," she said.

Beja, however, relayed that months before MetroPac submitted its unsolicited proposal to become the new bulk water supplier of the facility in 2015, both firms had already entered into an operations and management contract.

"The operations and management contract was made even before the joint venture agreement, busa siguro nakig-deal sa amo kay secured na ang supply (that is why maybe they made a deal with us because supply is already secured)," she said.

Beja said, neither the Rio Verde and MetroPac informed them of such undertaking.

"Kung ako pangutan-on, dapat mainform mi, kay sila baya karon, ang Rio Verde baya ang ga-supply sa amo (We should have been informed because they are our supplier right now)," she said.

Beja, however, said it is also difficult to ask the information from RVWCI especially with the pending resolution of the nullification case between COWD and RVWCI.

Beja said it will not matter if MetroPac will source its bulk water requirement from RVWCI since it is not prohibited under the joint agreement signed between the water district and MetroPac.

"Wala man pud giingon didto nga dapat sa Rio Verde siya mukuha or dapat dili siya mukuha sa Rio Verde so pwede ra gyud siya bisan asa mukuha (It was not stipulated that they should or should not source it from Rio Verde). Wala nami mabuhat kung muingon sila nga sa Rio Verde mag-supply kay gi-allow man sa kontrata sa water district (We cannot do anything if MetroPac will say they will source it from Rio Verde because it is allowed by the contract)," she added.

Before entering into the joint venture agreement, Beja said a committee was created by the COWD board of directors to study the unsolicited proposal submitted by MetroPac in 2015.

The provisions of the contract, she said, was approved by the board.

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