Capitol to MCWD: Comply with agreement to adjust contract price of water

THE Cebu Provincial Government wants the Metropolitan Cebu Water District (MCWD) to comply with the joint investment agreement between the Cebu Manila Water Development (CMWD) Inc., the joint venture firm of the Capitol, regarding the price adjustment of water.

During a press conference at the Capitol on Thursday, Jan. 12, 2023, Gov. Gwendolyn Garcia said the Province will suffer a great financial loss if the CMWD pushes through with charging MCWD P24.59 per cubic meter of water for the remaining 11 years of the 20-year contract.

“Where can you find a contract on such volatile commodity such as water where there are certain factors beyond our control as you produce water and as you treat water. This involves power, this involves manpower, materials and other supplies. Can we control inflation? Rising of fuel? In 20 years, can we say to power, stay put?” Garcia said in a mix of English and Cebuano. “No matter how you look at it, no one should have agreed to a price pegged for a period of 20 years especially when it comes to water,” she added.

She contradicted the MCWD’s statement that the price adjustment will require the approval of the National Economic Development Authority (Neda), adding that MCWD initially told them during the pre-bid conference that there was no need to secure such.

Provincial Board (PB) Member Glenn Anthony Soco, in a resolution on Monday, Jan. 9, slammed the “absurdly low” rate of P24.59 per cubic meter of water that CMWD is charging MCWD for 20 years.

With that rate, Soco said the CMWD won’t be able to remit the contracted 19.29 percent rate of return to the Provincial Government.

According to Garcia, the Province will be deprived of a huge income that can be funneled to improve infrastructure and healthcare services, among others.

The Provincial Government and the MCWD met several times to try and resolve the issue.

In a letter the Capitol received from the MCWD, dated Nov. 12, 2022, company officials agreed to implement the price adjustment starting Jan. 1, 2023.

They also agreed to provide Neda with a copy of the documents regarding the price adjustment and the payment to the Province of the monetary equivalent of the difference between the original price and the adjusted price.

Last Jan. 9, PB members authorized the governor to take all necessary steps to protect the Province’s interest in relation to the 2012 joint venture agreement (JVA) entered into by the Province and the MWCI, which created the CMWD.

The resolution aims to allow Garcia to correct or remedy any violations committed on the JVA that may place the Provincial Government at a disadvantage.

Garcia said the Capitol is waiting for the MCWD to fulfill their agreement regarding the price adjustment. (ANV / PJB)