DURING its next meeting later this month, the board of directors of the Cagayan de Oro Water District (COWD) is expected to approve processing emergency purchases in accordance to PhilGEPS requirements.
This, as the April 1 deadline looms if bulk water supplier Cagayan de Oro Bulk Water, Inc. (COBI) makes good its threat to withdraw their supply to COWD if the government-run utility could not pay up.
In a February 29 letter, COBI stated that it will “immediately halt the supply of water” within 30 days if COWD could not fully pay its P426 billion debt.
The 37-month debt from January 2021 to January 2024 stemmed from two price increases that COBI implemented in 2021 and earlier this year which COWD ignored.
The increases per three years is stipulated in the 2018 contract that COWD signed with COBI but due to the pandemic, the water district’s general manager Antonio Young cited force majeure as disregarding the P20.57 and now P24.19 per cubic meter rate.
The force majeure clause is also stipulated in the contract.
To mitigate the increase, COWD asked the City Council in January to pass the new charges down to its consumers via a P13.10 rate increase divided in three tranches but this was deferred by the councilors and even publicly opposed by Mayor Rolando Uy.
“Ako sila giingnan nga ayohon usa nila ang ila panerbisyo usa sila mag-increase,” Uy reiterated, also on March 4.
Young said during a video statement Wednesday that if they could not pass on the charges to its consumers, COWD will go bankrupt.
“It will never be a sound business,” Young said.
Last month was not the first time that COBI sent a demand letter to COWD.
In January upon learning of COWD’s ballooning debt with COBI, Uy immediately met with Metro Pacific Investments Corporation chairman Manuel Pangilinan and the crisis was averted.
Metro Pacific Investments Corporation is the holding company of Metro Pacific Water which controls 95 percent of COBI.
But with this fresh deadline, Uy and COWD are looking at emergency purchases as the immediate solution to the matter.
“Naa koy amigo nga willing motabang nga masolusyonan kini nga walay supply sa tubig nga maundang,” Uy said on March 4, stopping short of naming the provider.
But according to Young on the same day, Rio Verde Water Consortium, Inc. is the most feasible company in case of an emergency purchase.
Emergency purchases are governed by Republic Act 9184, otherwise known as the Government Procurement Act, via direct shopping or negotiated purchase.
Rio Verde has 100,000 cubic meters of capacity per day, more than enough to cover the 80,000 cubic meters supplied by COBI.
Also, its existing pipelines are the exact ones currently used by Cagayan de Oro consumers in the western sector where most of COBI’s provisions go in more than 40,000 households, businesses and institutions.
