Cagayan de Oro water supply crisis looms as billing dispute escalates

CAGAYAN DE ORO, Philippines – An ongoing dispute over increased rates since 2021 has threatened to disrupt Cagayan de Oro’s water supply, as a company controlled by business tycoon Manny V. Pangilinan’s group demanded a P430-million payment from the local water district.

The company, Cagayan de Oro Bulk Water Incorporated (COBI), has been selling treated water to the Cagayan de Oro Water District (COWD) since 2018.

In 2021, COBI raised the price from P16.60 to P20.57 per cubic meter, but COWD has not acknowledged the increase, citing the COVID-19 pandemic and a force majeure clause in their 2017 contract.

Last December, COBI sent a billing notice to COWD, insisting that the water utility owed it P430 million since 2021.

It warned that unless the bill is paid within 30 days from the receipt of the notice, it will halt the supply of bulk water to COWD. The notice was received on December 15, 2023, and the deadline lapsed this week.

Engineer Antonio Young, COWD general manager, said the water district has not been remiss in paying COBI for the bulk water supply at the agreed rate of P16.60 per cubic meter.

COBI sends about 80,000 cubic meters to COWD daily, constituting about 40% of the city’s water supply.

However, Young said the amount in question is still being negotiated by both parties, taking into account a rate adjustment unilaterally made by COBI in 2021.

Young said the bulk water provider raised its rate from P16.60 to P20.57 per cubic meter in 2021 based on the schedule of rate adjustments in their 2017 contract.

But he said COWD had asked the non-implementation of the rate increase, invoking the force majeure provision in the same August 17, 2017 contract due to the pandemic.

Young clarified that this is why the water utility has only been paying COBI P16.60 per cubic meter, despite the latter’s decision to increase the rate.

He added that the price difference, from P16.60 before 2021 to P20.57 from 2021 to 2023, makes up the bulk of the disputed P430-million debt.

Young said COWD has just paid its September and October bills based on the undisputed rate, and is already in the process of settling the water utility’s November bill, which, he added, will be paid by the end of the month.

COWD has sought the help of the city government to appeal to COBI not to implement its disconnection notice.

Young said that in a board meeting on January 12, COWD agreed to relay its position regarding the supposed debt to COBI. – Rappler.com

JB Deveza is an Aries Rufo Journalism fellow.