Cagayan de Oro water firms fail to resolve debt dispute as deadline nears

CAGAYAN DE ORO, Philippines – The Cagayan de Oro Water District (COWD) and its primary bulk water supplier have not yet reached an agreement over a disputed debt exceeding P400 million, with only one day remaining before the notice of disconnection deadline.

The supplier, Cagayan de Oro Bulk Water Incorporated (COBI), set the deadline for April 12 for COWD to settle the debt that has accumulated since 2021. However, COWD has refused to acknowledge the debt, arguing that it represents the difference in increased water supply rates which it did not accept due to the COVID-19 pandemic.

Lawyer Roberto Rodrigo, senior legal counsel for the Manny V. Pangilinan-led Metro Pacific Water, which controls COBI, told Rappler on Tuesday, April 9, that they were supposed to meet with COWD representatives a day earlier, with the Local Water Utilities Administration (LWUA) serving as the facilitator.

Rodrigo said the COWD requested to postpone the meeting to Friday, April 12, instead.

“COWD wanted to move the meeting to April 12, which is precisely the payment deadline,” Rodrigo said.

He said LWUA had urged COWD to attend the April 8 meeting, with COBI executives and LWUA representatives already waiting to meet COWD representatives online.

COWD General Manager Antonio Young said they skipped the meeting because one member of the water district’s board, Gerry Caño, was unavailable that day. Caño heads a COWD group tasked with negotiating with COBI.

Rodrigo said COWD also sent another communication on April 8, stating that it did not agree to LWUA serving as the facilitator, a claim that Engineer Young dismissed.

Young said, “Having LWUA as a facilitator is advantageous since it’s our regulator.” However, he added that LWUA was not included as a facilitator as indicated in a previous COWD letter to COBI.

COWD proposed setting another meeting with COBI on April 11 or April 12, but the latter has yet to respond.

The two parties had met on March 21 via Zoom, but no agreement was reached regarding the disputed debt.

Rodrigo earlier said a decision on whether to stop the COBI water supply to COWD after April 12 has not yet been made.

Meanwhile, COBI said the plan by another firm, Rio Verde Water Consortium Incorporated, to directly distribute potable water in the city does not, per se, violate its contract with COBI.

Rodrigo said COBI has no issues with Rio Verde’s plan as long as their contractual obligation to supply 100,000 cubic meters per day is met.

The treated water COBI supplies to COWD is treated and purchased from Rio Verde.

Based on their contract, Rodrigo explained, COBI is obliged to pay Rio Verde for a supply of 100,000 cubic meters per day. Likewise, Rio Verde is legally bound to sell COBI 100,000 cubic meters a day.

On Monday, the city council approved a resolution, expressing no objection to Rio Verde’s application “to provide an end-to-end Level III water supply” to unserved areas with inadequate water supply.

Rio Verde was the previous bulk supplier of COWD. However, the Commission on Audit (COA) flagged their transactions as having been conducted without legal basis, and their 2007 contract was voided by a court.

The dilemma between COWD and Rio Verde led to a 2017 deal with the water district and COBI, averting a potential water crisis in Cagayan de Oro.

Councilor Edgar Cabanlas said Rio Verde has assured them that the city would continue to have a sufficient supply of treated water, even if COBI decided to proceed with its disconnection notice to COWD.

In a March interview with local broadcaster Magnum Radio, Rio Verde President Joffrey Hapitan said they were capable of directly supplying the city’s water consumers with 100,000 cubic meters daily, enough for 200,000 households. – Rappler.com