MCWD finds new water supplier

MCWD
MCWDFile Photo

(UPDATED WITH CORRECTIONS) Two months after the termination of its water supply deal with Cebu Manila Water Development Inc. (CMWDI) for 35 million liters of water per day, and a day before an interim deal expires, the Metropolitan Cebu Water District (MCWD) will sign a new water supply contract, this time with Manila Water Philippine Ventures for its Cebu North Bulk Water Supply Project.

Originally set for Tuesday, Jan. 30, 2024, the contract signing did not push through as scheduled in the afternoon, as both parties had yet to agree on the amendments to several provisions of the draft contract.

Early Tuesday night, howe­ver, Jose Daluz III, chairman of the MCWD board of directors, said the parties had come to an agreement and the contract signing would take place on Wednesday, Jan. 31.

Under the contract, Manila Water Philippine Ventures (MWPV) will supply 30,000 cubic meters (30 million liters) of surface water per day to MCWD for about 10 years at a price of P58 per cubic meter for the first five years, with an increase of 10 to 12 percent of this rate for the succeeding five years.

The source of the surface water supply was not disclosed.

For the balance of 5,000 cubic meters (five million liters) of water per day that will not be supplied by MWPV, Daluz said Tuesday without elaborating that MCWD had found other suppliers to provide this.

CMWDI supplied 35 million liters per day (MLD) of surface water from its facility in the Luyang River in the town of Carmen. However, Cebu Gov. Gwendolyn Garcia announced on Nov. 29, 2023 the termination of the deal between CMWDI and MCWD, citing dissatisfaction at the price MCWD was paying for the water it was buying from CMWDI.

CMWD is a joint investment firm formed through a Joint Investment Agreement between the Manila Water Consortium Inc. and the Province of Cebu in 2012 to provide bulk water to Metro Cebu.

MWPV was selected among the bidders of the competitive public bidding that the MCWD Bids and Awards Committee organized for the Cebu North Bulk Water Supply Project, under Republic Act (RA) 9184, also known as the Government Procurement Reform Act.

The contract signing ensures that there will be an adequate supply of clean and potable water to MCWD consumers over the next few years.

Contract

In an interview with the press on Tuesday afternoon inside the MCWD conference room, Daluz explained the delay in the signing of the contract by saying MWPV wanted to add a specific phrase in a certain provision in the draft contract.

Daluz said the specific phrase that the MWPV wanted to include in the draft can be considered redundant as this was already specified in the Implementing Rules and Regulations (IRR) of RA 9184 and the 6th Edition of the Philippine Bidding Documents of the Government Procurement Policy Board.

He added that the content of the specific phrase was about the “grounds for termination” of the contract.

“Naay specific ground nga gusto nila ibutang didto. Whether ibutang nato na specific ground, meaning murag gusto nila i-set aside ang katong uban pang grounds sa RA 9184, it does not change anything because ang balaod gihapon ang atong sundon,” Daluz said.

(There’s a specific ground that they want to put there. Whether we put the specific ground there, meaning it seems they want to set aside the other grounds under RA 9184, it does not change anything because it is still the law that we will follow.)

However, Daluz stressed that without the signing of the new contract and with the upcoming expiration of the interim water agreement with the Cebu Provincial Government, consumers of the water district in the cities of Lapu-Lapu and Mandaue, and in the towns of Consolacion, Liloan, Compostela, excluding Cebu City and Talisay City, will experience low pressure to no water supply.

Terminated

The new contract with MPWV would enable MCWD to secure part of the water supply it lost after the joint investment enterprise of the Razon-led CMWDI and the Cebu Provincial Government terminated its contract with MCWD to supply 35 million liters of water per day, effective Dec. 1, 2023, due to the tariff rate that CMWDI deemed to be disadvantageous.

Garcia said CMWDI was operating at a loss due to the contract that fixed the water’s selling price at P24.59 per cubic meter until 2035.

This was amid the increasing costs of repair and maintenance, manpower, and other costs due to inflation.

To avert a water shortage, an interim agreement was signed between the Province of Cebu and MCWD good for 62 days, from Dec. 1, 2023 to Jan. 31, 2024, whereby the Provincial Government bought water supply from CMWD’s facility and sold it to MWCD at the same fixed rate and without any profit.

Daluz continues to function as MCWD chairman even after he was fired by Mayor Michael Rama last Oct. 31, along with board members Miguelito Pato and Jodelyn May Seno, and replaced with Melquiades Feliciano, Aristotle Batuhan and Nelson Yuvallos.

There are now two competing boards operating at the MCWD.

Feliciano is the chairman of the MCWD board backed by Rama.

***

[CORRECTIONS: The fourth paragraph has been updated to change “30,000 liters” to “30,000 cubic meters (30 million liters).” The sixth paragraph was also updated to correct the balance to “5,000 cubic meters (five million liters)” from the previous “35 million liters.”]

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