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PB authorizes Gov to file complaints vs water supplier
By: Mylen Manto | Published Tuesday, September 22, 2020
The Cebu Provincial Board approved on Monday, September 21 the resolution authorizing Gov. Gwen Garcia to file charges against Manila Waters Consortium, Inc. (Donald Moga)

Governor Gwendolyn Garcia can now file appropriate complaints against all those responsible in the “anomalous and grossly disadvantageous transactions” involving the bulkwater joint investment between the Province of Cebu and Manila Waters Consortium, Inc. (MWCI).

The Cebu Provincial Board (PB) approved on Monday, September 21, the resolution authorizing the governor to “file in behalf of the Province appropriate criminal, administrative, and civil cases” against MWCI.

PB Member and lawyer John Ismael Borgonia, author of the resolution, said the MWCI failed to comply with the terms and conditions reflected in the Joint Investment Agreement (JIA) it entered into with the Province of Cebu.

He enumerated in the resolution the five breaches committed by MWCI which were discovered after Garcia ordered a legal audit on the company.

These include the increase of the project cost or Capital Expenditure (capex) from P702,000,000 to P1,003,000,000; increase of tariff rate from P13.95 per cubic meter to P24.59 per cubic meter; and decrease of Project Internal Rate of Return (PIRR) from 19.23 percent to 12.30 percent.

The audit also discovered that MWCI failed to remit to the Cebu Provincial Government its receivables from January 2015 to July 2019 and funded back its earned revenues to the capex of the Joint Investment Company (JICO).

Borgonia said the increase of tariff rate and decrease of the PIRR were “clearly anomalous and deceptive” because MWCI was able to revert to the terms and references in its original bid in the Swiss Challenge, thereby disregarding the winning bid of Cebu Water Consortium (CWC).

CWC was one of the two firms pre-qualified by the Joint Investment Evaluation and Selection Council (JIESC) in the Swiss challenge for the bulkwater supply. 

Meanwhile, the MCWI was the original proponent after it submitted an unsolicited proposal to the Capitol for a bulk water joint investment utilizing surface water from Luyang river in Carmen town.

The changes in the JIA, Borgonia said, were not approved and authorized by the PB.

He added that since Cebu Manila Water Development, Inc. (CMWDI) started its operation, no share went to the coffers of the Capitol contrary to the terms and obligations stated in the JIA. 

These led Borgonia to ask the PB to give authority to the Governor to file appropriate complaints, to protect the interest of the Province. 

On March 21, 2012, the Province of Cebu and MWCI entered a JIA for the creation of CMWDI, a joint investment company for the construction and development of water supply facilities to deliver treated bulkwater in Metro Cebu with an option to engage in retail  by tapping the surface water source of Carmen’s Luyang River.

Despite the dispute between the Capitol and MCWI, CMWDI continued its operation as it has a juridical personality separate and distinct from that of its stockholders and members. (Mylen Manto)