BY GEROME DALIPE IV
ILOILO City – The Public-Private Partnership (PPP) proposal of Aboitiz InfraCapital Inc. to run the Iloilo Bulk Water Supply Project poses a challenge for the city government, according to Mayor Jerry Treñas.
The proposed build-own-operate (BOO) and build-lease (BL) contractual arrangements seemed complicated as it would require the city to form a new body to oversee the water distribution, he explained.
“Aboitiz plans to partner with both the province and the city. The city would be responsible for distributing or selling to a distributor, which seems complicated because we’re not used to that setup,” the mayor stressed.
Aboitiz InfraCapital Inc. has proposed to build, operate, and maintain the bulk water project that will supply 80 million liters per day (MLD) of potable treated water to consumers in Iloilo. The proposed P8.45-billion unsolicited concession is for 33 years.
Under the BOO and BL scheme, Aboitiz would sell treated bulk water directly to the city and province of Iloilo at a suggested Php51 cubic per meter.
The rate is double compared to the current water price of P20 per cubic meter for the first 10 cubic meters consumed by customers.
Essentially, the local government units (LGUs) would act as “middlemen” since they would buy the treated water from Aboitiz and then resell it to distributors, water districts, or other buyers who provide water directly to consumers.
Likewise, Treñas admitted the city government is only familiar with the current setup of some bulk water suppliers like the Metro Iloilo Bulk Water Supply Corporation (MIB).
Metro Iloilo Bulk Water serves as the bulk water supplier for the Metro Iloilo Water District, which provides water supply to Iloilo City as well as the towns of Cabatuan, Leganes, Maasin, Oton, Pavia, San Miguel, and Santa Barbara.
The mayor also said that Aboitiz’s proposal may result in higher water rates since the city and province of Iloilo and another distributor will also add the price of water per cubic meter to earn profit.
Although he is open to the firm’s proposal, the mayor said he will let the city’s PPP committee conduct a thorough study of the proposal.
While the city needs an additional water supply, Treñas said he would not allow such a scheme at the expense of the water consumers.
The PPC Center reported the unsolicited proposal was endorsed to the Capitol and the city government, the proposed implementing agencies for the project, on Aug. 9, 2024.
On the same date, the PPP Center received a letter from the Iloilo City Government that it was rejecting the unsolicited proposal.
The PPP Center has not received a copy of the decision of the province on whether to proceed with the detailed evaluation of the project.
Governor Arthur Defensor Jr., in his recent press briefing, said the province is currently evaluating the proposal, emphasizing that the evaluation is still ongoing and confidential./PN
