The Cagayan de Oro Water District says the LWUA can only take over if it defaults on its loan obligations
CAGAYAN DE ORO, Philippines – The Cagayan de Oro Water District (COWD) has sought the opinion of the Office of the Government Corporate Counsel (OGCC) regarding the decision of the board of trustees of the Local Water Utilities Administration (LWUA) for the regulator to take over the water district.
Engineer Antonio Young, COWD general manager, said on Thursday, May 23, that the water district has sought the legal opinion OGCC on May 18 regarding the resolution of the LWUA Board of Trustees that approved a full takeover of the water firm.
The LWUA board’s decision on May 17 came after President Ferdinand Marcos Jr. ordered the water district regulator to study the possibility of taking over COWD amid a crisis in Cagayan de Oro resulting from its ongoing debt dispute with its supplier, the Manny V. Pangilinan-controlled Cagayan de Oro Bulk Water Incorporated (COBI).
The COWD has disputed and refused to acknowledge a debt exceeding P400 million with the COBI, saying the amount represents an increase in rates that should not have been implemented in 2021 because of the COVID-19 pandemic.
The COWD has cited an OGCC opinion released on May 9 regarding LWUA’s partial takeover of the Metropolitan Cebu Water District to point out that “only when the district is in default of its loan obligation” can the LWUA take over or intervene in the operations of a water district.
The COWD also cited a part of the OGCC opinion that “procedures and remedies provided under the loan agreement must be exhausted before any takeover or intervention is resorted to.”
Young said the COWD has an existing loan with LWUA, with an outstanding balance of P11 million. He pointed out that the COWD is not in default since it has been paying LWUA P180,000 a month on time.
He also said the COWD has also made an overpayment of P600,000 for the loan with LWUA.
Young said the COWD has been paying COBI regularly based on the pre-pandemic water rates which are not under dispute.
“Wala man mi default sa payment even sa supplier kay gabayad mi sa supplier (We don’t default on payments, even to suppliers because we pay our suppliers),” Young said.
The COWD has yet to receive a response from OGCC as of posting time.
Rappler has sought comment from the office of LWUA Chairman Ronnie Ong about the status of the LWUA board resolution, but a staff member only said they would issue an update soon.
The COWD-COBI dispute had led to a disconnection of the supply of treated water to the water district, prompting President Marcos to intervene. In his May 16 visit to Cagayan de Oro, he announced that he discussed the matter with Pangilinan who then agreed to order the resumption of the COBI supply to COWD.
“Payag po si Mr. Pangilinan sa ating pakiusap at handa po siya makigpulong sa inyong alkalde upang matuldokan na ang suliraning ito,” Marcos told a crowd in Cagayan de Oro.
(Mr. Pangilinan has agreed to our request and is prepared to meet with your mayor to address this matter.)
The following day, May 17, COBI confirmed that it resumed its water supply to the local water district, but it maintained that it was “voluntary.”
Later, the same day, a regional court extended a 72-hour temporary restraining order (TRO) it first issued against the water disconnection on May 14.
In a six-page decision on May 17, Judge Ana Candida Casiño of the 17th branch of the Regional Trial Court (RTC) in Misamis Oriental ordered the TRO’s extension until June 3.
“It is inconceivable to let the people who are merely caught in the middle of the two disputing entities suffer injustice and be deprived of their right to water,” read part of the court ruling.
According to the court decision, the counsel of Rio Verde Water Consortium Incorporated, which sells treated water to COBI, had stated that they reconnected the supply upon receipt of the TRO. –Rappler.com