By HERBERT VEGO
OUR good friend Dr. Danilo Encarnacion, chairman of the board of the Metro Iloilo Water District (MIWD), waxed optimistic the other day in announcing that the Development Bank of the Philippines (DBP) had approved their application for a P150-million loan.
Well and good, but will that amount suffice to solve the city’s water lack in time for the Asia-Pacific Economic Cooperation Summit in September 2015? That is, granting that no part of the amount will be used to pay MIWD’s ballooning debt to its water supplier, Flo Water Resources.
On second thought, had not Encarnacion earlier mentioned they would have to borrow that amount of money to pay their ballooning debt to Flo?
Anyway, Encarnacion mentioned “February to March 2015” as target period for implementing its water-sufficiency program.
Reading between the lines, this corner infers doubt in Doc’s “optimism.” Otherwise, he would not have mentioned “joint venture” with Maynilad Water Services or any other private partner with acceptable proposal aimed at augmenting water supply.
Earlier, Iloilo City’s Mayor Jed Patrick Mabilog had chided MIWD officials for not coordinating with him on solutions to the water dearth.
When the Encarnacion board was re-appointed by Gov. Arthur Defensor Sr. early this year, they found out that MIWD had already gone bankrupt. Unfortunately, however, Encarnacion could not explain who had malversed its funds. He could not say how their predecessors comprising three sets of the interim board – one appointed by former Local Water Utilities Administration (LWUA) chairman Prospero Pichay and two by chairman Rene Villa – had stolen funds.
There was a time, however, when reinstated MIWD vice chairman Adrian Moncada revealed that the MIWD under the interim board was not depositing its collections in its depository banks.
Pichay’s and Villa’s acts were questionable because under Presidential Decree 198, it’s either the city mayor, if 70 percent of concessionaires come from the city, or the provincial governor who has the power to appoint the board.
In 2010, shortly before the interim board took over, the Encarnacion board was already wary that the MIWD management under general manager Le Jayme Jalbuena had defrayed funds that were eventually disallowed by the Commission on Audit. At that time, MIWD was still enjoying liquidity with more than P100 million in bank deposit.
Cases have been filed in court against “erring” (to put it mildly) MIWD employees but they are now gathering dust.
In 2010, MIWD vice chairman Moncada was already warning that “water pilferage” was a major cause of the water district’s financial decline and the reason why it could serve only 20 percent of its coverage areas, including Iloilo City and the towns of Cabatuan, Leganes, Maasin, Oton, Pavia, San Miguel and Santa Barbara. At that time, of MIWD’s average water production of 1,250,000 cubic meters per month, only 750,000 cubic meters was reaching consumer faucets. The remaining 500,000 cubic meters or 40 percent – euphemistically called “non-revenue water” – was wasted in pipe leakages and pilferages. Computed at a conservative cost of P28 per cubic meter, that loss amounted to P14 million monthly or P168 million yearly.
The situation must have gone worse because, despite the entry of Flo Water as bulk water supplier, residents of entire subdivisions can only say, “We used to enjoy MIWD water.”
As of last count the total number of concessionaires in Iloilo City had slid to only 21,130, or 66.14 percent of the total number of concessionaires. The combined number of concessionaires from the towns of Cabatuan, Leganes, Maasin, Oton, Pavia, San Miguel and Santa Barbara are 10,818 or 33.86 percent of the grand total.
This brings to mind the report of Castalia Strategic Advisors, a World Bank-financed international consultancy firm, that non-revenue water accounts for escalating financial losses of MIWD, believed to be the oldest water producer in the Philippines at the age of 90.
I remember that the Castalia group met with Mayor Mabilog, other Iloilo City officials and the then MIWD board (the reinstated one) around mid-2010 to suggest that MIWD transform itself into a concession management model, a form of public-private partnership in which the winning bidder/contractor would defray P1.1-billion to fund the capital expenditures, operate and maintain the water district, bill and manage the accounts. The MIWD itself would be downsized but would continue to retain the ownership of the fixed assets of the water district, monitor and enforce the concession contract.
This suggestion deserves a second look./PN
