Ayala group offers better deal for water woes

DUMAGUETE CITY – Fresh details emerged that a proposed joint venture agreement of the Ayala Group to the Dumaguete City Water District was allegedly set aside by the latter’s management in a less than honorable manner in favor of a rival.

Prompted by the revelations of the alleged covert negotiations and acceptance of the terms of the Metro Pacific Water Investments Corporation (MWPV) by DCWD, officials from Manila Water Philippine Ventures Inc. of Ayala Group and its partner Tubig Pilipinas Group Inc. presented their ill-fated proposal that would have preserved the independence of DCWD and lower tariff for consumers during the regular session of the City Council, Wednesday.

Despite a seemingly lost cause, MWPV proponent Jalil Madueno and his partner Ryan Yap of Tubig Pilipinas still presented the proposal to the public in a session that was snubbed again by the top officials of DCWD.

Both Yap and Madueno wanted the public to compare, which joint venture proposal that of MWPV or MWIC would be advantageous to DCWD and local consumers.

DCWD earlier defended its deal with MWIC as the best possible offer in order to address the growing gap between supply of water and the demand, which DCWD admitted that under the current state of the GOCC could not possibly provide that may result in widespread water shortage from 2018- 2042.

Both proposals would cover the next 25 years under a joint venture agreement that will ensure, 24/7 available potable water supply. But both proposals also have major differences.

 Control and ownership

MWIC would take 80% control of the Joint Venture Company, ceding only 20% to DCWD. In fact, MWIC will be able to utilize and control all existing facilities of DCWD. The 7-seat Board of Directors of the company will be divided accordingly: 5 for the private company being the controlling share and 2 for DCWD as the minority.

In contrast, MWPV/Tubig Pilipinas proposed an unincorporated joint venture, which means DCWD retains full control of its sphere particularly its regulatory functions through its full 5-seat board of Directors while the former will only focus on supplying bulk water sourced from Banica River, undergoes treatment and sold to DCWD for distribution to its consumer.

Career Opportunity for DCWD Employees:

Jonet Sanalila, MetroPac Project Manager for the Visayas said that the new Joint Venture Corporation may absorb existing “QUALIFIED” regular employees or hire new workers, whereas casuals have no certainty to be rehired while all the Job Order workers will be terminated by the new management. The regular DCWD workers will lose their security of tenure or seniority once the new Joint Venture Corporation takes over.

In contrast, MWPV/Tubig Pilipinas said that all existing employees of DCWD will be retained along with a signing bonus, while those who will chose to retire will be given packages bigger than if they opt to remain.

Water tariffs adjustments:

The new Joint Venture Corporation controlled by MetroPac “will charge the consumers a fee at a rate to be recommended by the corporation itself. The tariffs shall be adjusted as may be authorized under applicable law and the price of escalation mechanisms set out in the concession agreement.” Cagayan De Oro City officials have accused MetroPac of nearly doubling their water bills in just 2 years after takeover.

On the other hand, MWPV/Tubig Pilipinas will only impose reasonable tariff at 15% every 5 years and 10% adjustment in year 5 for sanitation services.

Investments for infrastructure development:

MetroPac will invest P 1 billion in the span of 10 years for water supply system rehabilitation, upgrading and expansion P 684 million; non revenue water reduction P 110 million; waste water treatment management P 111 million and other permit P 95.3 million. The new controlling private company will be able to source out the P 1 billion needed capital through equity and loans. Furthermore, MetroPac without the need of obtaining consent from DCWD assign or transfer all or any of its rights and benefits (including existing and new facilities) to lenders and or other persons providing financing to the project.

MWPV/Tubig Pilipinas will invest P 823.51 million in the next 25 years for water source and treatment P 180 million; replacement of mainline and service pipes built in 1984, P233.20 million; upgrading and construction of reservoir and service expansion, P 171.08 million; new water service connection P37.63 million; nutrient removal for sanitation, P99.90 million; procurement of service vehicles, office equipment, P 101.71 million.

Corporate Social Responsibility:

MWIC has not shared any CSR programs. On the contrary, MWPV/Tubig Pilipinas vows to provide free or subsidized connections for the poor, easier payment schemes, construction of drinking fountains and hand washing facilities, Lingap Eskwela and Lingap Palengke, loan assistance to marginalized sectors, partnership in relief operations and watershed protection.