Nalzaro: Privatization of MCWD

Bobby Nalzaro

THE water crisis we experience nowadays because of the inefficiency of the service of the Metropolitan Cebu Water District (MCWD) has triggered a “revolt” by various local government units (LGUs) under the service areas against the water firm. Their respective legislative bodies, including the Cebu Provincial Board, passed resolutions castigating and lambasting the water utility as it failed miserably to provide water to its consumers causing dissatisfaction and discontentment.

MCWD’s inefficiency resulted to the termination of members of its Board of Directors, the policy-making body, by Mayor Edgardo Labella, who is the appointing authority, including the resignation of chairman Joel Marie Yu. They were replaced by an interim board from the Local Water Utilities Administration (LWUA). But the problem does not end there. Consumers are still experiencing a water shortage even until now.

Over the weekend and over cups of coffee, a group of local columnists, editors and broadcasters discussed the water crisis. A fellow radio commentator who seems to be knowledgeable in dealings with the water issue provided the group with “inside information” on how some local politicians and big-time businessmen tried to maneuver and control the water supply in the Metro Cebu area. This was a long time ago before the Province of Cebu and the Manila Water Enterprise Inc., a Manila-based company, signed an agreement to supply bulk water to MCWD from Luyang River in Carmen town. Gov. Gwen Garcia is contemplating of terminating the deal because of breach of contract by the other party.

An editor floated the idea of privatizing the MCWD, a government-owned and -controlled corporation, to make its service more efficient like the one in Metro Manila where water supply has been taken over by two companies: the Manila Water Co. and Maynilad Water Services from the Metropolitan Waterworks and Sewerage System (MWSS). I am amendable to the idea.

The advantages of transferring government-owned assets to the private sector are increased efficiency and profits, largely because competition incentivizes innovation and improvement. Water privatization can improve infrastructure, lower costs and provide residents with clean and safe water they expect. Although, it has also its disadvantages, like decreased regulation and government revenue and possibly increase in rates. But if the rate is manageable, why not? We cannot buy convenience where water service is direct to your faucets and 24 hours service.

Take for example the Manila situation. Before the MWSS was taken over by Manila and Maynila Water, consumers also experienced a water crisis like Metro Cebu because of the poor service of MWSS. The water system’s infrastructures like pipes were dilapidated and they hardly improved their services. Like other government agencies, massive corruption also hounded the water firm. Their officials and board members were receiving fat allowances and benefits.

But when Manila and Maynilad Water took over, the water service improved because the two companies invested billions of pesos to improve infrastructure and its distribution system. Although, sometimes consumers experienced water rationing in some areas, especially during the dry season, when the water sources dried up.

Although, the deal between MWSS, Manila Water Company and Maynila Water Services became controversial these last few days after President Rodrigo Duterte found something “onerous” in the 1997 water concession agreement. He was not keen on cutting of the deal. He just wants to review the agreement and correct any defects. The President is expected to announce his decision on Jan. 6.

I think consumers may not worry about possible increase in rates because private companies are still under government regulations like the energy sector and toll regulation. In fact, Manila Water offers one of the lowest water rates among the country’s water distributors. It offers P504 per 30 cubic meters, while Maynilad offers P745 per cubic meter, ranking third from Baguio City (P1,237), San Jose Del Monte (P930) and Cagayan de Oro (P842). The current rate in Metro Cebu is P518 per 30 cubic meter.

Mag-unsa man nang barato pero way agas? Kay sa taas-taas gamay pero abunda og tubig.