CEBU CITY, Philippines – Contract disagreements were the main reason Cebu province terminated a joint investment agreement with Manila Water Consortium Inc (MCWI), also known as Cebu Water, Cebu Governor Gwendolyn Garcia told reporters on Monday, December 16.
MCWI consists of Manila Water, Vicsal Corporation, Metro Pacific Investments Corporation. and the province of Cebu.
According to Garcia, the termination is due to the discovery of multiple violations committed.
The local government claims the consortium used a project cost increase as justification to redirect funds into capital expenditures instead of paying their remittances to the provincial government.
According to Cebu province officials, Cebu Waters also changed business plans without informing the province nor seeking approval of the provincial board and decreased the shares of the province in the joint investment company.
In September, Garcia alleged there was a significant increase in a bulk water project cost from P702,000,000 to P1,003,000,000.
The joint investment agreement was entered into 2012 to operate the bulk water supply at the Luyang River in Carmen town, northern Cebu.
Garcia added the “province was really taken advantage of.”
MCWI currently provides 35 million liters of water to towns in northern Cebu.
Garcia said multiple meetings were held between Cebu Province and MWCI. She gave the consortium 90 days to fix alleged contract violations.
“In their lengthy explanation and justification, I could find neither acceptable justification nor legal basis in truth or in fact,” Garcia explained what prompted her decision to terminate the contract.
The contract cancellation follows controversies involving Cebu Water’s parent company Manila Water in water concession agreements in Metro Manila. (READ: Maynilad, Manila Water bankruptcy feared if extension talks fail)
Cebu, with its booming population, has also been facing water shortages in dozens of areas across Metro Cebu. – Rappler.com