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GSD File photo by Cong b. Corrales

Cobi’s undersupply: 20 million liters/day

By HERBIE GOMEZ, Editor in chief,
and NITZ ARANCON, Correspondent .

WATER supplier Cagayan de Oro Bulkwater Inc. has asked the Cagayan de Oro Water District for more time to deliver an additional 20 million liters of treated water a day to meet the increased demand here and in parts of Misamis Oriental that are being served by the utility.

Engr.  Bienvenido Batar, COWD general manager, revealed this even as Councilor Teodulfo Lao Jr. warned that the bulk water supplier could be charged with breach of contract unless it supplied 60 million liters to the COWD everyday as agreed.

“Kon at the start of the contract wala nila ma-deliver ang 60 thousand cubic meters per day ngadto sa COWD, considered gyud na nga breach of contract,” said Lao.

The 2017 joint venture agreement between COWD and the Manny V. Pangilinan-controlled Metro Pacific Water Investments Corp. provides that 60 days after Cobi is registered with the Securities and Exchange Commission, the firm is supposed to deliver 60 million liters or 60 thousand cubic meters per day to COWD. But until now, Cobi can only deliver 40 million liters or 40 thousand cubic meters a day.

Cobi, which is 95-percent owned by Metro Pacific, was reportedly registered with the SEC in late October 2017.  COWD has a five-percent stake in Cobi.

COWD chairman Eduardo Montalvan said he and Batar would bring the concern to the Cobi board when its directors meet this month. Montalvan and the COWD manager sit in the Cobi board.

Earlier, the bulk water supplier has asked for time to supply 60 thousand cubic meters a day citing that facilities of Rio Verde Water Consortium Inc. were damaged by storm “Vinta” late last year, said Montalvan.

Batar confirmed this, pointing out that the “delay in the implementation [is] because of the impact of typhoon ‘Vinta’…”

Rio Verde directly supplied treated water to COWD until the two firms terminated their decade-old contract in December. Now, Cobi is buying treated water from Rio Verde at a much higher price — from P10.45 per cubic meter to P16. The increased cost, however, has so far been absorbed by COWD.

COWD officials brushed aside the warning that the Pangilinan group could be charged with breach of contract because of the undersupply.

“Walay breach of  contract… kay force majeure man gud tungod sa Vinta,” said Montalvan.

Batar said a case for breach of contract is unlikely “because there was prior info from them.” But he said the bulk water supplier could suffer “monetary penalties” for the undersupply “based on a standard formula.”

The 2017 agreement provides that Cobi would only supply 20 million liters a day if COWD and Rio Verde did not terminate their contract. With the contract termination last year, Cobi was supposed to deliver 60 million to COWD daily.

But although COWD only pays Cobi for what has been delivered, the water shortage in some parts of the city has become evident.

Batar said the undersupply and the so-called non-revenue water or water wasted because of leaks are factors why the supply of tap water is not 24 hours in some areas.

Batar said the Pangilinan group has committed to deliver 80 million liters a day by the middle of the year.

The agreement provides that a year after Cobi is formed, it is supposed to deliver 20 million liters more per day on top of the supposed daily supply of 60 million liters, in order to boost the supply in eastern areas via a pipeline from Taguanao to COWD’s Camaman-an reservoir. This is seen to  benefit Camaman-an, the city proper, Lapasan and Gusa, among others.

But with the inability of Cobi to deliver 60 million liters a day, Councilor Lao said he doubts if the firm could further increase the supply.

Lao earlier expressed doubts that Cobi has the capability to deliver the volume of water that it is supposed to deliver based on the contract, pointing out that Metro Pacific-Cobi came into the picture without putting in place its own facilities.

He called on the COWD to act on the continuing shortfall in the water supply.

Lao said the undersupply explains the water shortage in the city. He said the COWD-Metro Pacific contract was “disadvantageous” to the city’s water consumers from the very start.

“In the first place, wala silay kaugalingong  (Metro Pacific-Cobi ) facilities. Sa Rio Verde ra  gihapon sila nagkuha ug tubig. Dili gyud sila maka-supply sa demand sa tubig ngadto sa mga consumers,” Lao said.

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