Davao City water firm plans to increase rates

DAVAO CITY – The Davao City Water District (DCWD) is planning to increase its rates due to the effects of the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Law and to support the expansion plans of the water utility in the city.

Lawyer Bernardo D. Delima, DCWD spokesperson, said on Monday that the possibility of the water rate increase was being studied by the DSWD to arrive at a rate that will not be cumbersome for the consumers and fair to both all.

“We are at the in-house level. We are examining how much it will be, what will be the right rate. On our part, we do not want to overburden the public,” he said.

He said the DCWD also saw the need to increase the water rates as the imposition of the new tax rates had also jacked up the cost of inputs of the water utility, and it might not be able to fund the DCWD’s expansion plans at the current water rate.

According to Delima, the DCWD was “absorbing” the effect of the TRAIN Law on its operation.

In determining the new water rates, Delima said the parameters being considered were that it should not exceed 60 percent of the current rate, which is R137 for the first 10 cubic meters of monthly consumption, and the minimum rate should not exceed 5 percent of the income of minimum wage earners.

He said when the Local Water Utilities Administration (LWUA) approved 60 percent of the proposed water rate increase of the DCWD in 2005, the water utility implemented it in tranches, which was 30 percent on the first year, and 10 percent annually from 2012 to 2014.

Delima said the non-approval of the water rate increase would cause a delay in the timeline of the implementation of the DCWD projects that are already in the pipeline.

“We need to consider we will be needing to expand our water system. We only covered 70 percent in the urban area. We need to expand our water supply pipes in areas that we do not reach,” he said, adding that expansion of the pipelines is a continuous process because of the growing demand for water here.

“Dili pasabot nga nahuman namo ang pipe lane pasagdan na mo na (It doesn’t we have completed the improvement of our pipe lane, we can now leave it as is). Sooner, it will be replaced by another one,” he said.

He added smaller pipes would have to be replaced with bigger ones in preparation for the R12-billion Davao City Bulk Water Supply Project (DCBWSP) of the Apo Agua Infrastructura Inc., a joint venture between Aboitiz Equity Ventures (AEV) and J.V. Angeles Construction Corporation (JVACC).

Based on the joint venture agreement, Apo Agua would take charge of the water extraction and treatment while DCWD will be tasked with water distribution. The project will have the capacity to supply over 300 million liters of potable water daily upon its completion in 2021.

The DCWD has 220,000 service connections at present.