Clark Water’s action plan approved after reduced tariff rate offer

On condition for a reduced tariff rate proposal, the Clark Development Corporation (CDC) has finally agreed to give Clark Water Corporation (CWC) the notice to proceed with its compliance action plan (CAP).

This, after the CWC, a subsidiary of Manila Water Company, Inc., agreed to CDC’s condition to cap the tariff increase at ₱4.35 per cubic meter (/cu.m) over a four-year period.

CDC’s CAP is pursuant to Department of Environment and Natural Resources’ (DENR) Department Administrative Order 2016-8 (DAO 2016-8), which sets the water quality guidelines and general effluent standards for public and private water utilities.

The negotiation for the terms of the CAP has been the subject of discussion between CDC and CWC even before CDC President Manuel R. Gaerlan (Ret) took over the government corporation.

It took CDC and CWC another three months under Gaerlan’s management to reach a workable agreement.

CDC’s main contention against CWC’s original proposal is the consequent extraordinary tariff adjustment (ETA) of ₱24.70/cu.m for water and wastewater.

The proposed ETA was reduced to ₱11 per cubic meter after CDC denied the original proposal.

According to CDC, CWC earlier argued that they will spend around ₱1.4 billion to implement their solution with the use of the membrane sequenced batch reactor (MSBR) technology.

For its part, CDC engineers proposed the use of a hybrid bio-phyto remediation solution that incorporates microbe reactors with a reed bed to address the effluent standards for ammonia, nitrates, and phosphates.

The CDC solution was said to entail a much lower capital expenditure and a maximum of 30 percent of the operational expenditure compared to that of CWC’s MSBR technology. CDC argued that the lower costs will result in much lower adjustments in the tariff.

BioCleaner Corporation, a US-based company endorsed by the US Commercial Service of the US Embassy, estimated that the tariff adjustment using their technology will range from ₱3.08 to ₱4.35 per cubic meter.

The bio-remediation approach costs a fraction of CWC’s setup and demands much lower electric consumption.

CDC said it had to make a decision that favors its locators amid the pressure coming from the DENR and the regional director of Environmental Management Bureau (EMB).

Just earlier this month, Environment Secretary Roy A. Cimatu came to Clark and met with CWC and CDC officials.

After his visit, he tasked DENR Undersecretary for Policy and Plans Jonas R. Leones to ensure CWC’s compliance to DAO 2016-8.