Hapitan: Rio Verde ‘morally bound’ to supply water to Oro

By JB R. DEVEZA
Contributor

A TOP official of the firm that provides treated water to the city’s bulk water supplier said they are willing to set aside their 25-year contract with the latter and supply directly to the Cagayan de Oro Water District (COWD) should the city’s bulk water provider and the city water district fail to reach an agreement by month-end.

Engineer Joffrey Hapitan, President of Rio Verde Water Consortium Inc., said they can begin directly supplying treated water in as short as 30 minutes if the Cagayan de Oro Bulk Water Inc (Cobi) implements its disconnection notice to COWD.

Cobi has given the COWD until March 31, 2024, to settle its supposed P426 million debt or face disconnection.

Hapitan said if the disconnection is implemented, they are ‘morally bound’ to directly supply COWD through an emergency purchase agreement to ensure that city residents do not go waterless.

Cobi, a firm controlled by business tycoon Manny V. Pangilinan’s Metro Pacific group, sends about 80,000 cubic meters to COWD daily, constituting about 40% of the city’s water needs.

Hapitan, who claims he only became aware of the dispute over rates between Cobi and the COWD just recently, said Rio Verde is willing to take the place of COBI should the city push for the termination of the bulk water supply contract between Cobi and the COWD.

City Mayor Rolando Uy last March 6 had created a special task force to look into the dispute between the COWD and Cobi as well as scrutinize the existing contract between the two parties to see if the contract is disadvantageous to city residents or not.

Hapitan said he told Mayor Uy regarding Rio Verde’s willingness to step in but said he also gave the mayor, in a January 4, 2024 meeting, a letter of intent by Rio Verde detailing the firm’s plan to lay distribution pipes so it can directly supply water to consumers.

He said this arrangement would make up for a possible termination of their own 25-year bulk water supply agreement (BWSA) with Cobi.

Rio Verde entered a BWSA with Cobi from 2022 till 2047 which can be extended if both parties so decide.

Asked for comment, Cobi’s senior legal counsel said Rio Verde can take steps to cancel their BSWA as long as the proper legal steps are taken by the latter.

However, lawyer Roberto Rodrigo said the termination of the contract between Cobi and Rio Verde is unlikely as he still looks forward to settling their row with COWD.

In an earlier statement, Rodrigo had called on the COWD to address ‘ongoing challenges in their partnership’ as this had already made a negative impact on Cobi’s financial standing.

In a statement, Rodrigo said aside from the non-payment of the P426 million, delays of COWD in settling monthly invoices, exceeding the contractual time frame by around 30 to 45 days, has affected Cobi’s ability to fulfill its financial obligations to banks and suppliers.

The COWD has refused to acknowledge its supposed P426 million debt to Cobi, asserting that much of this amount consists of rate adjustments implemented without their consent.

The BWSA between COWD and Cobi mandates automatic adjustments to bulk water rates effective from January 2021 through December 2023 and subsequently from January 2024.

The COWD management had said that they had appealed to Cobi not to implement the 2021 rate increase due to the pandemic.

Cobi’s Rodrigo, however, said it was only last year when they came to know that COWD is invoking the force majeure clause in their contract. Rodrigo said COWD, because of the pandemic, had only asked that collection of the rate adjustment be collected at a later date.