On Capitol-MWCI water deal: PJ Garcia eyes House inquiry

CEBU, Philippines — Manila Water Consortium Inc. (MCWI), developer and operator of a bulk water facility in Carmen, Cebu, saw its contract with Cebu provincial government terminated three weeks ago over a string of alleged violations.

It now appears that its battle didn’t end with the termination.

In another move meant to expose the truth behind MCWI’s alleged violations, Cebu Third District Rep. Pablo John “PJ” Garcia will lobby to either extend the ongoing House inquiry into the Manila Water Co. (MWC) to the Cebu-based consortium or launch a separate probe into the consortium altogether.

To note, MWC became the subject of an investigation by the House of Representatives earlier in December following the ruling of Singapore’s Permanent Court of Arbitration that the Philippine government owes billions to the water supplier for the losses it supposedly incurred after the government refused to approve water rate hikes.

One aspect of the inquiry was checking whether there were truths to reports that MCW’s net income allegedly increased 6 percent in the same months the losses were sustained.

MCWI is a water development consortium in Cebu but is under the wing of Manila Water Co.

Yesterday, Rep. Garcia told reporters that his sister, Governor Gwendolyn Garcia, has informed him of the multiple violations allegedly committed by MWCI, particularly on the provisions of the Joint Investment Agreement (JIA) it forged with the Capitol in March 2012.

The JIA provides for the development and operation of a bulk water facility at the Luyang River in Carmen. The water generated from the facility is sold to water utility firms for distribution among households in most parts of Metro Cebu.

“The governor has talked to me about it and we will definitely be joining in that probe and to see the possible… its relationship with what is happening in Cebu to see if there is a pattern,” the congressman said in an interview during the opening of a new barangay road, covered court, and health center in Kangdampas, Barili town yesterday.

“There seems to be a pattern of onerous provisions to the detriment of the government and consumers,” he added.

The proposed House inquiry will not be the first time the violations were exposed.

Several weeks back, Governor Garcia’s legal counsel looked into how the water consortium had operated over the past years.

The results indicated the following “violations”:

First, the project cost was increased from P702 million to P1.003 billion.

Second, MCWI had not been remitting its dues to the province.

Third, the province’s share in the revenues was reportedly “plowed back” to capital expenditures.

Fourth, the tariff rate was increased from P13.95 to P24.59 per cubic meter.

And lastly, the project’s internal rate of return, a measure of the yield of an investment, was allegedly reduced from 19.23 percent to 12.3 percent.

Because of this, the Provincial Board, on December 9, approved a resolution terminating the Capitol’s contract with MWCI.

Rep. Garcia said that he has yet to decide if the investigation would be an extension of the existing House inquiry into MWC or a separate probe altogether.

“I will study that and when we resume session in January, I will see if it is a separate one or it can be included in an expanded investigation,” he said.

Meanwhile, the Governor Garcia has already begun talks with MWCI following the prescribed steps under the JIA.

Garcia has not disclosed further details about the ongoing talks, but prior to such meetings, MWCI had refused to see the violations from its end as grounds for termination.

Nevertheless, Garcia’s administration was determined to sever Capitol’s ties with the water consortium.

The series of talks is expected to carry on until next year. (FREEMAN)