Lao: water rate hike ‘obvious’
City Councilor Teodulfo ‘Bong’ Lao Jr. said it is getting to be as clear as day that a water rate increase is in the works after learning that MetroPac Water Investments Corporation (MetroPac), the water districts soon-to-be treated bulk water supplier, will get its bulk water from Rio Verde Water Consortium Inc. (RVWCI), the water utility’s present supplier.
Lao said he learned of this supposed development from Cagayan de Oro Water District (COWD) chairman of the board Eduardo Montalvan during the committee hearing last Friday, November 10, which tackled the water woes of areas in the city’s western side.
“He (Montalvan) said that Rio Verde is not new to MetroPac and vice versa because the two had an arrangement in the past few months for maintenance and operations. Meaning, if this pushes through, Metropac will be one of the owners of Rio Verde,” Lao said.
Lao said the supposed arrangement between MetroPac and RVWCI was reached because the latter is barred from entering into a new contract with COWD as this is not allowed by the Commission on Audit (COA).
“Paingon gyud ta sa water increase in the future (We are really headed to a water rate increase),” Lao said.
Lawyer James Judith said he also learned that both water companies reportedly entered into a own joint venture agreement for the management and operation of the firm that will supply bulk water to COWD.
“Actually, walay problema kung nagsabot ang mga kompanya. But in violation siya sa Anti-competition Act, mao ng mag-file mi next week sa Philippine Competition Council
(PCC) (It is not really a problem. But this is in violation of Anti-competitive Act and that is why we are going to file a case at the PCC),” he said.
Judith said he will question the contract, pointing out that the agreement is ‘anti-competitive’ as it allows both to seemingly corner the market, which is the people of Cagayan de Oro.
Judith is referring to Republic Act No. 10667 or the Philippine Competition Act signed into law by then President Benigno S. Aquino III on July 21, 2015.
The law established the quasi-judicial Philippine Competition Commission which is tasked to ensure efficient and fair market competition among businesses engaged in trade, industry, and all commercial economic activities.
The law prohibits “anti-competitive agreements, abuses of dominant positions, and mergers and acquisitions that limit, prevent, and restrict competition’ which can be detrimental to consumers.
Judith said it is obvious both companies are trying to control the water rate.
“Walay option ang tawo, but mapugos ta na dawaton ang presyo, mao ni ilang gibuhat, (People are left with no option and consumers will be forced to pay the rate. This is what they are doing),” Judith said.
He said both companies have “cartelized” the water industry in Cagayan de Oro.
Montalvan, for his part said, whatever RVWCI and MetroPac agree upon is no longer the business of COWD.
“We don’t have a say on that. Whatever they do, it’s their decision,” Montalvan said.
In August this year, the COWD and MetroPac signed a joint venture agreement for the supply of 100,000 cubic meters of treated water per day.
The COWD earlier said that MetroPac has three options to address its requirement: to construct a new treatment plant, to purchase bulk water from an existing water treatment plant, and the outright purchase of an existing water plant.
MetroPac is said to start its operations late this year or January next year.
Montalvan had assured the council that the rate hike, from P10.45 to P16.35 per cubic meter that MetroPac said it will be asking, will not be passed on to the consumers.
He said the price difference of the Rio Verde and MetroPac’s rates will be absorbed by the COWD.
Montalvan also told the council that they are making sure that the contract with MetroPac will not be flagged by the Commission on Audit.
“We are making sure that it will abide by PD 9184 or the Procurement Law, that the P16 we will be paying MetroPac follows all the procedures. That is why we have no doubt that this will be allowed by COA,” he said.
Montalvan said that while the MetroPac is expected to supply bulk water for the city’s western part where consumers are experiencing water shortages, the firm will eventually supply treated bulk water for the eastern part too.