Water crisis in Cebu (Part II)

Metro Cebu Water District officials have been scrambling to find additional sources of water to meet the increasing demand in Metro Cebu.

But the good thing is, there are several other agencies such as the Cebu Uniting for Sustainable Water, Cebu Partners Committed to Environmental and Economic Management, University of San Carlos-Water Resource Center that are seriously taking the challenge to help solve the problem. These agencies have been working to address the concerns on the shortage of water as well as the conservation of water, water quality monitoring, education campaigns, and the protection of Cebu's watersheds and aquifers.

With the depletion of the underground water source, MCWD has been exploring all possible water sources, especially the surface water. It even implements a self-moratorium on underground water extraction just to preserve underground water. The National Water Resource Board has also sent cease and desist orders to several establishments that are operating private wells.

Because of this, MCWD chairman Juan Saul Montecillo said his company is open to proposals from the private sector to develop surface water sources, including desalination. The water firm also recently reopened negotiations for the Carmen Bulk Water Project and the possible rehabilitation and operation of its 14 wells in Compostela town.

The water utility has also recently introduced the results of the feasibility study conducted by a Japanese firm on the proposed water desalination plant on Mactan Island.

It is also doing repairs of its old pumps and improving its pipes to prevent leakages, and strictly monitoring water pilferage to prevent waste of water and improve its delivery to franchise areas.

Last summer, amid concerns of lack of water, Mayor Tomas Osmeña proposed to impose tax on private wells to fund a water resource development program. The mayor is targeting to tax 70 percent of the city residents who are relying on private deep wells for water supply.

Expressing concern over lack of fresh water supply, the mayor said there is an immediate need to tap other sources of water. He also expressed approval for desalination, saying it could help in solving the water supply depletion in the city.

Carmen Bulk Water Project

In April last year, President Gloria Macapagal-Arroyo was in Cebu to witness the signing of a memorandum of agreement to preserve and enhance the watershed of Luyang River in Carmen town. Luyang River would be the source of water for Metro Cebu should the Carmen Bulk Water Project push through.

The MCWD had signed a memorandum of agreement with Ayala Corporation and Stateland, Inc./Central Equity Ventures, Inc. as the developer of the project. Under the project, Carmen Bulk Water would supply MCWD with 50,000 cubic meters of water a day at P23 per cubic meter in 2006, when the project is expected to be operational.

However, the project has received opposition from several consumers, MCWD employees union and even Osmeña himself, who said the project is too costly and consumers might have to suffer the burden of high water rates in the future.

But Montecillo said that they have consultants that are now studying all the aspects of the project. At present, he said, what is important was that the MCWD reopened negotiations with the contractor to pursue the project. "We have consultants from the BOT Center (Build Operate Transfer Center, an attached agency of the Department of Trade and Industry) who are studying the project. We are keeping this alive," Montecillo said, adding that they have hired local and foreign consultants that would study its legal, technical and financial aspects. Compostela wells

Montecillo also said MCWD is also starting to renegotiate with Compostela to let the water utility rehabilitate and operate its wells. He said the proposal to reopen the 14 wells is a two-way process because they also offered the Compostela government that they would rehabilitate and operate the wells.

However, the cost for rehabilitation alone would amount to about P70 million, including the replacement of old pumps. The MCWD has invested P100 million through a loan from the Local Water Utilities Administration to construct the wells in the town in 1992, but they remain idle because the municipal government blocked their operation for fear that it might affect the town's water supply.

The local officials of Compostela under Mayor Antonio Dangoy had blocked the operation of the wells due to some environmental concerns. Dangoy said his town must first be allowed to convert the 1,500 hectares of its watershed area for commercial and industrial purposes before Metro Cebu can have access to its water.

But Montecillo said that with the recent development, they are hopeful that the wells will soon be able to pump additional water for MCWD.

"What is important is the line for communication is open and we are talking with the local officials," he added. Once rehabilitated and operational, the 14 wells could provide additional supply of about 15,000 to 20,000 cubic meters of water a day, he explained.

MCWD's alternative water sources

PROJECT NAME AND COST: Mananga Phase II
PROPONENT: Johan Holdings Berhad
VOLUME IN CUBIC METERS PER DAY: 100,000
ESTIMATED COST PER CUBIC METER TO MCWD: P24 (reference year 2001)
REMARKS: Negotiations started in 1994. The proponent asked for a performance undertaking from the national government as guarantee in case MCWD fails to pay, which NEDA Investment Coordination Committee opposed. After five years of negotiation, MCWD gave last chance to the proponent to waive the requirement. Last minute, it waived its performance- undertaking requirement, but it changed its tariff from P18/cu.m. to P24/cu.m.,which at that time was quite expensive.

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PROJECT NAME AND COST: Inabanga, Bohol Water Supply (P3.2 billion)
PROPONENT: Brown and Root/Anglo Philippines
ESTIMATED COST PER CUBIC METER TO MCWD: $0.80 (1995 prices when exchange rate was still P26/$1)
REMARKS: The proponent encountered socio-political problems. MCWD asked to lower its price but it did not come back anymore.

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PROJECT NAME AND COST: Improvement and rehabilitation of MCWD water distribution system
PROPONENT: Compania Generale de Eux/Aboitiz Group of Companies
REMARKS:It was agreed at the onset to be on a "no cure no pay" scheme. Negotaitions proceed with using build-lease-transfer as approach guide. Two years after negotiations, proponent not keen on implementing "no cure, no pay" scheme and backed out of negotiations.

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PROJECT NAME AND COST: Carmen Bulk Water (P1.86 billion)
PROPONENT: Ayala Corp. and Stateland Inc.
VOLUME IN CUBIC METERS PER DAY: 50,000
ESTIMATED COST PER CUBIC METER TO MCWD: P25.75
REMARKS: Project to be implemented under build-operate-transfer law. NEDA board confirmed first pass approval for project in November 2004. Negotiations still on going.