ILOILO City’s endorsement of Aboitiz InfraCapital’s (AIC) bulk water supply proposal could more than double water rates for consumers, according to figures from the National Irrigation Administration (NIA).
Despite NIA’s rejection of the unsolicited proposal in March, the City granted AIC Original Proponent Status and advanced the project to a Swiss Challenge.
NIA, backed by the Asian Development Bank (ADB), said the plan conflicts with its advisory agreement with ADB for the Jalaur River Multi-Purpose Project Stage II (JRMP II), the intended water source.
The agency also cited violations of the Public-Private Partnership Code, which prohibits unsolicited proposals when a comparable government-backed project is underway.
NIA said the AIC plan competes directly with a government-to-government arrangement with the Metro Iloilo Water District (MIWD) designed to keep water affordable.
Under AIC’s Build-Own-Operate/Build-Lease model, local governments could pay availability fees of up to P27 billion over a 33-year concession period, even if actual demand is lower than projected. Water rates could reach over P41 per cubic meter, more than twice the current rate of P18 per cubic meter.
The MIWD–NIA–ADB scheme, pursued since 2017, is projected to supply water at a lower cost without imposing contingent liabilities on local governments.
In July, MIWD and NIA signed a memorandum to study the full 86 million liters per day allocation from JRMP II.
Higher water tariffs under the AIC proposal would add to household expenses at a time when prices of other essential goods and services are also rising.
The City Government has yet to explain why it is pursuing the project despite a cheaper, publicly funded alternative backed by a multilateral lender. (PR)