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HomeFront PageBreaking NewsKlarex, Lordan welcome LWUA's intervention; COWD questions it

Klarex, Lordan welcome LWUA’s intervention; COWD questions it

By MARK FRANCISCO

OFFICIALS of the Cagayan de Oro Water District (COWD) questioned the legitimacy of what the Local Water Utilities Administration (LWUA) dubbed as a “full intervention” into the water utility.

In a May 29 letter, LWUA corporate secretary Julius Basa informed the COWD directors and general manager Antonio Young that they would cease to function in their respective capacities while the full intervention of six months is in effect.

Basa cited the failure of COWD to meet its financial assistance contract obligations as the main reason for the full intervention which he said was based on a LWUA board resolution dated May 17.

But in a press conference later in the day, Young said that COWD had not remiss in its financial assistance contract obligations and in fact already paid P600,000 advance in the past month.

“We only have P11 million balance under our financial assistance contract,” Young said.

LWUA since 1973 has been financing water supply projects through funds secured from national government subscriptions, bilateral and multilateral fund sources, internally-generated funds, second generation funds and government and private financing institutions.

LWUA then allocates and re-lends these funds to water districts at competitive terms in the form of financial assistance contracts.

Simultaneously with the release of Basa’s letter, LWUA chairman Ronnie Ong made a surprise courtesy call on Mayor Rolando Uy and announced the agency’s full intervention on COWD.

Uy assured Ong that the local government acknowledged LWUA’s action but reiterated his stand to protect the general welfare of the people from unjust water rates.

The mayor explicitly expressed his reservation on the 2017 contract between COWD and its supplier Cagayan de Oro Bulk Water, Inc. (COBI) which provided automatic increase of its supply rates every three years.

A task force created by Uy had concluded that this clause is disadvantageous to COWD, and ultimately the consumers via new water rate increases.

It is this premise that COWD is currently locked in a bitter dispute with COBI because of warring interpretations on the implementation of their contract.

While COWD has been using the force majeure clause since 2021 due to the Covid-19 pandemic, COBI refused to recognize it and continued implementing the automatic rate increase per three years.

The ensuing debt (the difference between the old and new water rates) has ballooned to P479 million as of presstime, with neither side budging in the now six-month-long negotiations.

With this new LWUA order, the agency has appointed a four-person interim board of directors who are expected to take over the negotiations with COBI on behalf of COWD.

They are Antonio Ramirez as chairman and Noel Bacal, Donn Kapunan and Amelia dela Rosa as members. LWUA also appointed Fermin Jarales as interim general manager.

Backed by police security, the interim contingent trooped to the COWD main offices along Corrales Avenue Wednesday afternoon to implement the full intervention.Young said the interim officials are welcome to stay at the premises anytime but they would not recognize them as such legally pending an opinion on the matter from the Office of the Government Corporate Legal Counsel (OGCC).

Young continued saying that stepping down from his post is tantamount to dereliction of duty.He added that he had already communicated all division chiefs of COWD and informed them that the directors of the utility had already passed a resolution earlier that they would not recognize LWUA’s action.

Pressed on during the news conference, Young said every COWD employee down to the last lineman and collector including personnel at their production wells and extension offices recognize the authority of the beleaguered board and management.

Jarales just brushed this off though.
“Trabaho lang ta. We will just be implementing lawful orders,” he said in an impromptu interview outside the COWD premises.

First district Rep. Lordan Suan also welcomed LWUA’s action.

“As LWUA assumes control over COWD, I am optimistic that this marks a significant step towards resolving our long-standing water supply challenges. This takeover marks the beginning of a new era of better water services for Cagayan de Oro City,” he said. Over 40,000 residential and institutional consumers in his district use water supplied under the contract between COBI and COWD.

These consumers experienced no water for almost a day last May 14 after COBI made good its threat to disconnect its supply after six months of debt payment negotiations always end in stalemate.

The disconnection was only lifted when a regional trial court issued a restraining order that same day.Even then, trickling of water from source to households took more than two days due to the aging pipes’ inability to handle huge pressure at once.

“The journey to improve our water supply has been tough, with many obstacles,” Suan admitted.

“Despite these challenges, my steady focus has always been on the welfare and well-being of our people. Let us look forward to a future where our water supply meets the needs of every household and community,” he concluded.

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