AFTER just 12 days of new leadership at the Cagayan de Oro City Water District (COWD), the interim management took a decisive step on Monday. They formed a special committee to investigate whether the collection claims made by COBI are legitimate.
Led by General Manager Fermin Jarales, the interim management updated the Local Water Utilities Administration (LWUA) about the ongoing situation.
This update came twelve days after LWUA’s full intervention began, according to Jarales.
The COWD Interim Board of Directors (IBOD), chaired by Antonio Ramirez, held a joint meeting with the LWUA Board of Trustees, led by Chairman Ronnie Ong.
This collaborative effort aimed to address the pressing water crisis in the city.
Jarales mentioned that if the dispute resolution meetings fail, COWD would follow the arbitration procedure stipulated in their contract. This arbitration could take place in Singapore, as per their agreement.
During a radio interview, Jarales clarified that attending these dispute resolution meetings does not mean COWD agrees with COBI’s stance.
He emphasized that COWD is maintaining its position on COBI’s P479 million final collection notice.
Observers from the Local Water Utilities Administration (LWUA) were present at the meeting to ensure transparency and fairness.
LWUA took full control of COWD following an order from President Bongbong Marcos.
The intervention was aimed at resolving the city’s ongoing water crisis.
As a result of this intervention, General Manager Antonio Young and the five-person board were suspended for six months.
LWUA then appointed Jarales as the interim general manager, following consultations with Mayor Klarex Uy.
Mayor Rolando “Klarex” Uy of Cagayan de Oro City has expressed strong support for LWUA’s actions.
He outlined his expectations for the intervention, which include serving as an impartial mediator between COWD and COBI, ensuring no future water disconnections due to disputes, reviewing the 2017 contract, reforming the automatic escalation of water rates, and addressing mismanagement at COWD.
Right to Water Upheld
Residents viewed COBI’s water disconnection as a tactic to gain leverage.
Councilor Edgar Cabanlas, head of the Water Task Force, stated that the contract does not authorize disconnection over disputes.
He stressed that the issue should be decided in court.
Cagayan de Oro faced a severe water crisis after COBI cut off the bulk water supply to COWD on May 14, 2024.
The water supply was restored only after a court issued a 72-hour temporary restraining order (TRO) against COBI and its supplier, highlighting the people’s right to water over contractual disputes.
COBI had directed its supplier, Rio Verde Water Consortium Inc. (RVWCI), to disconnect the supply due to unpaid obligations. This led to a significant disruption of water services.
On June 3, 2024, Judge Jeofpre Acebido issued a Writ of Preliminary Injunction to prevent further disconnections.
The court’s 13-page order noted COBI’s promise to halt disconnections but mentioned that this promise was uncertain and contingent on future negotiations, continuing to affect the petitioners.
Contractual Issues
In 2017, COWD signed a contract with COBI to supply a minimum of 80 million liters per day (MLD) and a maximum of 100 MLD. This supply covers 40% of COWD’s water needs. The contract also included automatic rate increases every three years.
The base price in 2017 was P16.60 per cubic meter.
COBI increased this rate to P20.57 in 2021 and again to P24.19 on January 1, 2024.
However, COWD did not recognize these increases, citing a force majeure clause due to COVID-19.
COWD argued that it could not meet the new rates because it charges end users only P21.84 per cubic meter.
As a result, COWD continued to pay COBI the 2017 rate of P16.60, leading to a P479 million differential by April 30, 2024.
In response to the impending water cut-off, Mayor Uy declared a state of emergency on May 1, 2024.
The City Council also passed a resolution urging COWD to procure emergency water from other suppliers.
Mayor Uy stated that while the city does not wish to intervene in the COWD-COBI dispute, his primary responsibility is to protect the welfare of the people.
COBI, the main bulk water supplier to COWD, purchases its water from RVWCI since it lacks its facilities.
The situation in Cagayan de Oro remains tense as all parties work towards a resolution that ensures continuous water supply while addressing the contractual and financial disputes between COWD and COBI.
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