The Mandaue City Government signed a compromise agreement with Asian Energy Systems Corp. to settle a P9.3 million lawsuit regarding unpaid garbage disposal fees, pending final approval from the court.
Once approved, the city intends to resume direct waste disposal at the company’s Consolacion facility, ending its current reliance on third-party hauling contractors that increased annual costs to over P200 million.
City Administrator Gonzalo “Sally” Malig-on Jr. stated that Mandaue will continue using third-party contractors until the court and the Commission on Audit formally approve the settlement and new disposal contracts.
THE Mandaue City Government has signed a compromise agreement with Asian Energy Systems Corp. to settle a lawsuit over unpaid garbage disposal fees amounting to P9.3 million, a move that officials say will allow the City to resume direct waste disposal at the company’s Consolacion facility once the agreement receives court approval.
The settlement is expected to reduce the City’s solid waste management costs by ending its reliance on third-party hauling contractors, which the City adopted after the legal dispute prevented it from directly using the landfill.
City Administrator Gonzalo “Sally” Malig-on Jr. said Mayor Thadeo Jovito “Jonkie” Ouano signed the agreement on behalf of the City.
“We have officially signed a compromise agreement,” Malig-on said. “The agreement is being submitted to the court for approval.”
Malig-on said Asian Energy sued the City during the previous administration after Mandaue failed to pay garbage disposal fees for using the company’s sanitary landfill.
Court’s approval needed
The compromise agreement must first be approved by the court before it is submitted to the Commission on Audit for review.
Malig-on said any payment under the settlement will be made only after the required approvals. Until then, Mandaue will continue using third-party hauling contractors.
Malig-on said the lawsuit prevented the City from directly disposing of its garbage at Asian Energy’s facility in Consolacion town, forcing it to hire contractors to transport and dispose of its waste.
Expensive third-party hauling
This arrangement, he said, became more expensive after access to other disposal sites, including the Binaliw landfill in Cebu City, became limited.
Under the previous setup, the City spent about P60 million to P70 million a year on landfill tipping fees. Malig-on said the shift to third-party hauling increased annual solid waste management costs to more than P200 million.
He said the City expects to reduce those expenses once it resumes direct disposal operations.
“Our current hauling arrangement will remain until the compromise agreement receives court approval,” Malig-on said.
After the settlement is finalized, the City will conduct procurement in accordance with government rules before awarding a waste disposal contract.
If Asian Energy wins the bidding, Malig-on said Mandaue plans to restore direct hauling from barangays to the Consolacion facility instead of routing garbage through intermediate transfer stations.
The arrangement, he said, is expected to reduce hauling time and fuel costs for the City’s garbage collection operations. / ABC