Water crisis worsens in Cagayan de Oro as payment dispute threatens city’s supply

CAGAYAN DE ORO, Philippines – While water supply in most parts of Cagayan de Oro was restored on Monday, March 4, the crisis is far from over.

The city government confirmed receiving a copy of a letter from Cagayan de Oro Bulk Water Incorporated (COBI) to the Cagayan de Oro Water District (COWD), the city’s primary water distribution firm, demanding payment of P430 million in unpaid water bills. It served as the second disconnection notice to COWD.

COBI President Christopher Andrew Pangilinan informed COWD that unless the water district paid the bill within 30 days from the day the demand letter was sent on February 29, water supply will be cut off throughout the city.

COBI is the main supplier of treated water to COWD, and the dispute over Cagayan de Oro’s water supply involves these two entities, which have interlocking ownership.

COBI, a joint venture between Metro Pacific Water owned by businessman Manny Pangilinan and COWD, the primary water distribution firm in Cagayan de Oro, was established on August 14, 2017. Metro Pacific Water holds 95% equity, while COWD holds the remaining 5% and is responsible for the distribution and supply of water to the city.

COBI sources its bulk water supply from Rio Verde, another company owned by businessman Pepito Alvarez, which operates a water treatment facility in neighboring Baungon, Bukidnon. The facility has a capacity of processing and supplying 100 million liters a day. 

As of December 31, 2022, COWD served a total of 146,630 households and establishments. However, it has hesitated in paying COBI and has urged the local government to intervene and settle the dispute.

Engineer Antonio Young, COWD general manager, said the amount being claimed by COBI represented the rate increase implemented by the bulk water supplier at the height of the COVID-19 pandemic period.

Young asserted that COWD did not agree to the increased rates and never acknowledged the debt, citing the force majeure clause in their contract with COBI.

“The increased rates were not reflected in our books. It was the worst period of the pandemic. As far as COWD is concerned, we have been paying our bills based on the agreed rates on time,” Young said.

Cagayan de Oro Mayor Rolando Uy has formed a task force led by Councilor Edgar Cabanlas to investigate the transaction between COWD and COBI, saying that he had to intervene as the water crisis has already affected thousands of residents. 

Uy said that if the investigation showed that residents are being shortchanged in the transaction between COBI and COWD, he would not hesitate to take further action, including seeking legal recourse to rescind the agreement between the two entities.

The city council, led by Councilor Romeo Calizo, chair of public utilities and traffic management, said it would start an investigation this week.

Cabanlas said, “The people are being misled by the two corporations when they claim that last weekend’s issue was due to repairs on the pipes, but the real issue here is the non-payment.”

Last weekend, residents were left without water after COWD cut off the water supply to at least 26 barangays in the city supposedly to relocate and repair a broken pipe distribution system.

Young told reporters the COWD had to suspend the water supply distribution to allow the bulk water supplier to carry out major repairs on a critical pipe in its distribution system.

As a result, firetrucks and water tanks from COWD city hall, the Bureau of Fire Protection (BFP), and other private companies brought water to the affected areas. – Rappler.com