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Tuesday, July 23, 2019

PCC, Oro councilors to discuss local water industry

LAWYER James Judith and three Cagayan de Oro City Councilors will meet with the Philippine Competition Commission (PCC) on February 21 to discuss about the local officials' complaint on the supposed "cartelization" of the local water industry.

In their letter-reply, PCC's assistant director for Competition Enforcement Office Ferdinand Redulla invited the complainants Judith, Councilors Reuben Roa Daba, Teodulfo Lao Jr., and Enrico Salcedo for a meeting on February 21 at the PCC office in Manila.

Redulla asked Judith for some documents, such as the formula for computing the water rate of P10.45 per cubic meter; the factual basis in support of the allegations that the joint venture between Cagayan de Oro Water District (COWD) and MetroPac Water Investments Corporation (MWIC) resulted to an increase in price from P10.45 to P16.35 per cubic meter; the "model agreement" with alleged disparities to the signed Bulk Water Supply Agreement (BWSA), the alleged Operation and Maintenance Agreement entered between Rio Verde Water Consortium, Inc. (RVWCI) and MetroPac Water Investments Corporation, including RVWCI waiver of its rights under the BWSA.

Redulla asked for the court records, including the compromise agreement of the COWD versus Rio Verde case, records of “suits and countersuits” filed by COWD and Rio Verde, MetroPac's Unsolicited Proposal to COWD as well as all documents relating to the thee-stage procurement process that resulted to the Joint Venture Agreement dated 14 August 2017 between COWD and MWIC.

Redulla also asked for a copy of the audit report on the Results of the Audit on Alleged Graft and Corrupt Practices Act of the Board of Directors Together with the Contractor, Rio Verde and the then Local Water Utilities Administration (LWUA), and all other documents relevant to the complaint.

In November 15, 2017, Judith, representing the councilors, urged the PCC to initiate the appropriate legal action and a motu proprio investigation, or a probe initiated even without any complaints filed.

The complaint pointed out that the entry of (MWIC), which has started its contract with COWD last December 31, 2017, will be a burden to consumers instead of providing relief with its expensive water rate at P16 per cubic meter.

Judith said the outgoing bulk water supplier of Cagayan de Oro City Water District (COWD) which is the Rio Verde Water Consortium Inc. (RVWCI), cannot compete or challenge the MWIC offer after it agreed to sign an operations and management contract with the MWIC.

The actions of two major water players of Cagayan de Oro showed that "there is the apparent cartelization of the local water industry, with the purpose of maintaining the desired water rate to their advantage at the rate of P16.35 per cubic meter, thus P5.90 per cu. m. higher than the COA disallowed rate of P10.45 per cu. m. and restricting competition for that matter".

In an interview, Judith said the reply shows that they have chance in their campaign against the apparent cartelization of the water industry.

"I am vindicated like never before in my life, it is not for me to make a prediction as to the outcome of the case it is just we that we have a fighting chance in this campaign. This is for the people, it may be a lonely fight but a fight we should do," he said.

"The PCC is a relatively new government agency created for this kind of situation. Whatever happens, we are enriching jurisprudence as we have no guide in these cases, we are trailblazing the way," he added.

The PCC is an independent quasi-judicial body created to promote and maintain market competition by regulating anti-competitive conduct.

It can order disgorgement, null contracts, and mete out fines and penalties for violations of the Philippine Competition Law, with administrative fines of at least P100 million for the first offense.
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