COA: Aging pipelines, leaks cost Legazpi water district P44M in 2023

MANILA, Philippines – Aging pipelines, leaks, and unauthorized connections cost the Legazpi City Water District (LCWD) nearly P44 million in losses in 2023, a Commission on Audit (COA) report showed.

State auditors flagged the LCWD after they noted that the water district’s non-revenue water (NRW) reached over four million cubic meters last year.

The wasted water accounted for 36.3% of the treated water that should have reached homes and establishments in Legazpi, Albay, showed a 2023 COA report.

In its annual report, COA said such losses exceeded the acceptable NRW limit of 20% set by the Local Water Utilities Administration (LWUA).

Out of the water LCWD distributed in 2023, only 7.15 million cubic meters reached the water district’s customers. 

COA said the water district’s struggle with NRW has been ongoing, with rates at 37.4% in 2021 and 34.6% in 2022, a problem that put emphasis on the urgency for LCWD to address its infrastructure issues and enforce stricter measures against water theft.

“High level of NRW is detrimental to the financial viability of water districts and to the quality of water itself,” read part of the COA report.

The COA noted that in its 2023 financial statements, LCWD logged an income of P272.8 million, an increase of P8.35 million compared to its 2022 earnings of P264.524 million. 

Yet, despite this uptick in income, its expenses surged from P259.41 million to P271.38 million year-on-year. State auditors said LCWD’s net income plummeted to a mere P10.7 million, a 46% decrease from the previous year’s P19.01 million.

COA said LCWD’s aging pipelines, leaks, and unauthorized water diversions factored in the water district’s high NRW levels, and it could have generated some P43.8 million more if only it lowered its NRW to the standard set by LWUA.

State auditors said LCWD has been promising to work in reducing its NRW and losses but not much progress has been seen in the last three years. –Rappler.com