power and water

Water district deal with Villar firm under fire as Malaybalay faces crisis

Herbie Gomez

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Water district deal with Villar firm under fire as Malaybalay faces crisis


(1st UPDATE) The problem in Bukidnon's capital city is traced to a joint venture agreement between the Malaybalay City Water District and a company headed by a scion of the influential Villar family

CAGAYAN DE ORO, Philippines – Poor service from a company contracted to handle tap water distribution has been causing all sorts of trouble in Bukidnon’s capital city, where many people can’t do their household chores the way it’s normally done. In some areas in Malaybalay City, people can’t even wash their socks properly.

The problem, however, is just the tip of the iceberg and has been traced to a joint venture agreement between the Malaybalay City Water District (MCWD) and PrimeWater Infrastructure Corporation, a company headed by a scion of the influential Villar family.

For about three years now, PrimeWater has been calling the shots in the distribution of treated water in the city of about 200,000 people based on a 2020 deal that state auditors frowned upon in a recent audit report.

The company is led by Paolo Villar, a son of former Senate president Manuel Villar Jr., a real estate tycoon who topped Filipino billionaires on the 2023 Forbes World’s Billionaires List. Paolo’s brother Mark and mother Cynthia are senators.

Where’s the water?

Malaybalay is dealing with weak and inconsistent water pressure. The situation has gone from bad to worse in many areas of the city, where people complain that just when they think they’ve got a decent flow going – poof! – the tap water disappears faster than a magician’s rabbit.

In some areas, residents have it even worse because they don’t see a drop of water all day long. Others complain that they only get a trickle in the mornings and evenings.

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Rio Rezin Etcuban, a resident of Legacy Homes in the village of San Jose, told Rappler on Wednesday, July 12, that the problem has put a damper on daily activities that require clean water.

Etcuban, a civil engineer, said there was a time when they went for three days without tap water.

“We buy gallons of purified water so we have something to drink. That’s just for drinking, and because that’s costly, some people here opt not to take a bath,” he said.

He said the situation has been going on since he moved to the subdivision from Barangay Casisang in 2021.

Etcuban said, “Almost every week, we experience two to three interruptions.”

Junriel Gumapit, a baker in Aglayan, said the water supply problem has affected their work and the bakery operations itself.

“We fetch tap water elsewhere and pay for it. When the water finally gushes out, it’s already night time when all the workers are already home,” he said.

A resident took to a Facebook discussion thread on Wednesday to vent her frustration. “It’s been nearly a whole week now since we haven’t gotten any water supply. We’re literally out of clothes to wear because we can’t even do the laundry. Can you please have some sympathy for us? We always pay our dues on time, so it’s only fair that we receive the service we deserve,” she wrote in Bisaya.

Her plea came in response to a public notice regarding a scheduled water service interruption affecting 19 barangays in Malaybalay City. The interruption is scheduled to occur on Thursday, July 13.

But the repairs are endless, and every time the water distribution company or its supplier fixes something, what follows are hours or even days of water service interruption.

Crisis proportions

Former MCWD general manager Juanito Aroa blamed the situation on the 2020 agreement between PrimeWater and MCWD. Although a joint venture on paper, he said, the deal effectively reduced the MCWD board to a rubber stamp.

Since 2020, he said the MCWD’s task has been to merely monitor compliance with its contract with PrimeWater.

“Everything I worked for when I was the water district’s manager went down the drain because of that JVA (joint venture agreement),” Aroa told Rappler.

He said the problem with the water supply in Malaybalay has now reached crisis proportions as a result of the 2020 deal, which he said was “questionable if not illegal.”

“There was no hearing, no consultation whatsoever in Malaybalay. Everyone was taken aback when they learned that PrimeWater had taken over. The situation is really bad now. There’s no water,” Aroa said.

According to Aroa, PrimeWater had initially attempted to negotiate a joint venture agreement with the MCWD when he was still its general manager, but he and members of the water district’s board at that time rejected the proposal.

“I saw the proposal to be disadvantageous to the MCWD. I said that if we needed to expand, then we could simply secure a loan. We didn’t need a private company taking over our operations,” he said.

Repugnant deal

State auditors saw the 2020 agreement the way Aroa sees it. In a report, the Commission of Audit (COA) cited several issues and non-compliance with guidelines and regulations surrounding the MCWD-PrimeWater deal.

“The JVA between the MCWD and PrimeWater is evidently repugnant to PD 198,” read a May 10, 2022 letter sent by COA-Northern Mindanao director Celso Vocal to MCWD chairman Timoteo Baliquig and general manager Nolito Binahon.

Presidential Decree 198 refers to the Provincial Water Utilities Act of 1973.

Vocal said that under the joint venture agreement, the MCWD has ceased to be locally controlled and managed. Instead, he said, PrimeWater is controlling and managing its operations.

He also noted that the official receipts acknowledging payment of water bills are in the name of PrimeWater and that the majority of MCWD’s workers were replaced with PrimeWater personnel.

“Also, instead of the national level giving support in the area of technical advisory services and financing, the JVA circumvents this in favor of PrimeWater,” read part of Vocal’s letter.

Bulk water supply problem

In a statement on Monday, July 17, PrimeWater said the joint venture in Malaybalay recently faced challenges due to disruptions in the city’s bulk water supply system.

The city bulk water supply comes from the local government through the Malaybalay City Government Water Supply System (MCWGSS).

PrimeWater said 80% of the water it distributes comes from the MCWGSS.

“Recently, there were disruptions in the bulk water supply system resulting in interruptions in the supply system,” read part of PrimeWater’s statement.

It said daily interruptions from 11 pm to 1 am resulted in an estimated undelivered volume of 1.5 million liters during those periods. 

This month alone, PrimeWater said, the bulk water supply system had several downtimes due to repairs on the bulk water system transmission lines, with an average duration of six hours each, causing more undelivered volume of water in Malaybalay.

The problem, the company said, has been exacerbated by unpredictable weather conditions, including heavy rain and flooding. These, it said, required emergency repairs, resulting in interruptions, and turbidity in Malaybalay’s water supply.

PrimeWater said they have a daily water supply capacity of 27 million liters of water, and operate six small deep wells and three surface waters.

It said proactive initiatives, including leak detection and repairs, resulted in the reduction of non-revenue water (NRW) or water losses.

The water losses, according to PrimeWater, decreased from 44% in October 2020 to 29% in June 2023, leading to the recovery of 25 million liters of water daily for usage in Malaybalay. 

Improvements, it explained, require configuration, rehabilitation, repair, upsizing, pipelaying, and de-clogging – Rappler.com

1 comment

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  1. ET

    Thanks to Mr. Herbie Gomez for this very important but “dry (waterless)” article affecting the welfare of the People of Malaybalay City. May we ask that a copy of the said Joint Venture Agreement be published in public through Rappler with the names of signatories involved? Include also the COA report which cited “several issues and non-compliance with guidelines and regulations surrounding the MCWD-PrimeWater deal.” Who or what institution should have taken action over such report? Will Mr. Gomez also ask what the City Government of Malaybalay has done or been doing about this issue? This issue was already raised during the March 31, 2023 Malaybalay City Business Forum. So, perhaps, the City Government of Malaybalay has already acted on this. Thanks again to Journalist Herbie Gomez. Hoping for a second article on this subject from him.

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Herbie Gomez

Herbie Salvosa Gomez is coordinator of Rappler’s bureau in Mindanao, where he has practiced journalism for over three decades. He writes a column called “Pastilan,” after a familiar expression in Cagayan de Oro, tackling issues in the Southern Philippines.