Citing need to sustain operations: MCWD eyes hike in rates

CEBU, Philippines —  With no adjustments in the last seven years, the Metropolitan Cebu Water District (MCWD) is seeking a water tariff adjustment by July 1, 2023 to be able to sustain its operations.

The Local Water Utilities Administration (LWUA) allows water districts to apply for a rate adjustment every five years, but MCWD opted to put it on hold in 2020 due to the Covid-19 pandemic.

The last MCWD water rate adjustment was implemented on Jan. 1, 2015.

Currently, MCWD collects from residential connections a minimum water fee of P152 for the first 10 cubic meters of water consumed or P15.20 per cubic meter.

An average household connected to MCWD normally consumes 21 cubic meters of water per month.

Its water fee is P399.80 or a total bill of P430.99 including other charges of P91.19 that covers franchise tax, power cost adjustment (PCA) and purchased water adjustment (PWA).

In the proposed adjustment, the same household will pay a water fee of P543.68 or a total bill of P561.90 including franchise tax of P10.87 and PWA of P7.35.  PCA is already incorporated in the water fee of the proposed adjusted rates.

With this, in the first year of adjustment the total bill difference between the present and the new rates is only P130.91 per month or P4.30 per day while in  July 2024, the same household will have a total bill of P617.36 or a difference of P55.46 from the previous year.

For households that consume an average of seven cubic meters of water per month, its total bill with the present water rate is P183.17 a month including a water fee of P152 and other charges of P31.17 and will become P250.21 once the adjustment is implemented next year; this including the water fee of P 243.20 and other charges of P7.31 or just a difference of P67.34 from the old rate.

MCWD’s water is potable and is sold at about P.040 per liter.

Increased Costs

MCWD said it has been absorbing the increasing operational expenses and purchased water costs ranging from P25 to P32 per cubic meter.

From 2015 to present, MCWD has spent P2.1 billion on its expansion and rehabilitation projects in order to serve its consumers better, and another P12 billion on operational expenses.

One of its major projects is the P1.1-billion Lusaran Bulk Water Project which is expected to deliver 15,000 cubic meters of water per day starting September this year.

This project will directly benefit the residents of barangays Busay, Lahug, Apas, Camputhaw, and Capitol Site, which are considered underserved due to the lack of water supply, as well as nine mountain barangays that are not yet served by MCWD.

With the supply from Lusaran, MCWD will have to absorb the high cost of water from September until end of June 2023 or about nine months as the water rate adjustment will only take effect in July.

Even after the implementation of the adjustment, MCWD’s minimum water rate of P25.05 per cubic meter is still much lower than the actual cost of the purchased water.

“We have been absorbing the increasing operational costs and our reserved funds are already depleted.  We really need this adjustment in order to continue with our operation.  We are not profit-oriented.  This is only for us to continue operating and serving our consumers,” MCWD Board of Directors Chairman Jose Daluz III explained in a statement.

MCWD is a government-owned and –controlled corporation and a non-profit entity.  It is self-sustaining and does not receive funds from the local and national governments.

Cheapest

Despite being the most important commodity, MCWD stresses it remains the cheapest as compared to other household utilities like electricity at P13 per kwH, cellphone load at P600 per month, Internet bill at P1,200 per month or bottled water at P20 per liter.

Although the start of adjustment is still about a year from now, Cebu City Mayor Michael Rama, however, has asked the MCWD Board to review further their proposed adjustments.

“I ask the MCWD Board to further review its planned imposition of new tariff and consider seeking adjustments, only if it must, on a staggered basis to spare the consumers any adverse effects until 2025,” said Rama in a statement furnished to The Freeman.

Rama said it is the government’s duty to ensure the people will not be burdened by their supposed need for basic services.

“It is my duty as Mayor not to agree if the constituents of Cebu City will experience any added unreasonable burden, especially in these trying times. While MCWD will impose a new tariff yet by July 1, 2023, to impose it at an abrupt rate of 60 percent is rather unreasonable, especially when we still work to recover from the effects of the pandemic and recent calamities,” Rama emphasized.

Rama had also asked the City Council to conduct a public hearing regarding the impending increase.

“As Mayor, I also ask the City Council to call for a public hearing so that all consumers can speak out freely about the increase MCWD wants to impose. I will actively participate. I cannot just put this on the side.It is important that we in the Executive and the Legislative determine what is equitable and fair, as we are still working to rise back from the crises, and now aiming for a Singapore-like Cebu City,” he said.

Rama also recalled that MCWD's failure to deliver water to those in need during typhoon Odette proved its inadequacies and that the water utility must address these to deserve the support of the public on any increase.

 Rama also tackled about desalination plants that MCWD is pursuing.

“In pursuing projects like desalination, make it available to all interested suppliers. MCWD can choose the best reasonable offer that is equitable based on affordability, the ability of different consumers to pay. Desalination is only an interim solution. We don’t want it, but we have no choice. However, the pricing should not be expensive that it would take advantage of the rich and the industries purportedly for social subsidy,” Rama said.

In relation to this, Rama discussed anew his intention of building a dam that he said would last for generations to come.

“This issue brings to forth what I have been calling for, to build a dam that would collect a abundant rainfall so that a surplus in supply would mean lower rates for the consumers," he said.

"In saying that a dam project is too expensive, we have heard that song before, even as early as 1992. We had enough of that statement. When will we ever learn? It is about time to bite the bullet. Had we addressed it long time ago, the cost will not be as many billions that it will cost today. Desalination projects that may seem cheap against a dam are just pocket solutions that don’t last long. A dam lasts generations,” he added.

Rama said he would bring up this matter to President Bongbong Marcos for the national government to pour its resources and help realize it.

While waiting for the realization of the dam, Rama instructed the City Agriculture Office to pursue the construction of gabion dams in the hinterlands along with the DEPW.

Rama also urged all households to place cisterns at home, but be mindful that these do not become breeding ponds for mosquitoes that may carry dengue.

“I also ask our constituents to help conserve water. Rains may have been pouring these days, but it can become scarce in time,” said Rama.

The Office of the Building Official, together with the Liga ng mga Baranagay president and ex-officio councilor Franklyn Ong, had been asked by Rama to monitor and report if new buildings and houses are constructed with cisterns as the city ordinance requires. – JMD (FREEMAN)