LWUA approves full takeover of Cagayan de Oro water firm

CAGAYAN DE ORO, Philippines – The Local Water Utilities Administration (LWUA) decided on Friday, May 17, to take over the management and operations of the Cagayan de Oro Water District (COWD) as an offshoot of a supply crisis that resulted from its debt dispute with a bulk water supplier.

The LWUA board passed Resolution 34-2024, approving LWUA’s full intervention in the COWD for at least six months although the period may be extended.

The intervention means the appointment of an interim COWD general manager and interim board of directors by LWUA Administrator Jose Moises Salonga, showed a  copy of a document certified by LWUA corporate board secretary Julius Paolo Basa.

The decision came a day after President Ferdinand Marcos Jr. ordered the regulator of water districts to look into the possibility of LWUA taking over the COWD during his Cagayan de Oro visit.

The LWUA said the move would enable it to determine short- and long-term solutions to the water supply problem in Cagayan de Oro, and carry out a viable non-revenue water (NRW) reduction program.

The Commission on Audit (COA) has repeatedly flagged the COWD because more than half of its water supply was being wasted due to pipe leaks and illegal connections.

COWD’s NRW exceeds the COBI bulk water supply, which accounts for nearly half of the treated water intended for distribution in Cagayan de Oro.

Based on the resolution, LWUA would also operate the entire COWD system, and address any irregularity and problems in its obligations to LWUA, its suppliers, and the city’s water consumers.

The LWUA said it would also implement other measures “that will address all violations and all the causes of default.”

COWD’s problems became more pronounced after it refused to acknowledge a ballooning debt to the COBI, a company controlled by business tycoon Manny V. Pangilinan’s Metro Pacific Water. The disputed debt since 2021 has so far reached P479 million.

COWD General Manager Antonio Young has repeatedly said the water district cannot pay for a debt it has not acknowledged. He said the amount represented the increase in rates COBI implemented in 2021, during the COVID-19 pandemic.

Young said the COWD has invoked a force majeure clause in its 2017 contract with COBI to oppose the rate increase.

Unable to reach a settlement, COBI cut off its supply of treated water to COWD on Tuesday, May 14, prompting the water district to go to court where it secured a 72-hour temporary restraining order later on the same day.

COBI, however, resumed the water supply after Marcos intervened and requested Pangilinan to have it restored. – Rappler.com