(Logo taken from the Cebu Provincial Government FB page)
CEBU CITY – Governor Gwendolyn Garcia is firm in her decision to terminate the joint investment agreement (JIA) with Manila Water Consortium Inc.
“It’s just rather very significant that presently, President Rodrigo Duterte is also taking action against Manila Water and Maynilad for those agreements which are grossly disadvantageous to the Filipino people,” Garcia said in a radio interview on Tuesday.
She said she would no longer meet with the executives of Manila Water to negotiate the JIA but instead discuss to them the dues that the Province of Cebu could collect from the firm.
“Negotiations with Manila Water is off the table,” she said, stressing that the provincial government is “weighing our options” against Manila Water “to protect the interest of the Cebuanos.”
The province has notified the firm about its “five breaches” that legal consultants of the Provincial Capitol discovered in the JIA for the period of six years when Garcia was elected congresswoman representing the 3rd District of Cebu.
Reportedly, the firm’s breaches include the increase in the capital expenditure (Capex) from PHP702 million to PHP1.003 billion, increase of tariff rate from PHP13.95 per cubic meter to PHP24.59 per cubic meter, decrease of the projected internal rate of return (PIRR) from 19.23 percent to 12.30 percent, failure to remit the province’s receivables as per the JIA, and plowing back Capitol’s earned revenues to the Capex of the project.
During a regular session on Monday, the Provincial Board passed an en masse resolution authorizing Garcia to sign the termination notice against Manila Water.
On August 29, Garcia issued a notice of breach against Manila Water, through its president and chair of the board of directors, Virgilio Rivera.
In the notice, she gave the firm 90 days to cure the alleged breach in the JIA. She, however, said that she was not satisfied with Rivera’s response dated November 4.
The JIA between the province of Cebu and Manila Water was signed on March 21, 2012, creating the company, Cebu Water, with a 49-51 percent profit-sharing scheme in favor of the private company.
In the JIA, the private company agreed to manage bulk water supply from Luyang village in the northern town of Carmen, Cebu.
The PHP1.1-billion water project started producing 35 million liters of water every day for Metro Cebu households through the Metro Cebu Water District (MCWD).
The governor wants the company to account for an estimated PHP150 million of revenues supposedly for the province. (PNA)
