DUMAGUETE CITY – If the Dumaguete City Water
District (DCWD) will not do anything to arrest the increasing gap between the supply and demand for water, the time will come when Dumagueteños will experience rationing of water.
The statement was issued by DCWD general manager Esperatu Dicen on Thursday, a day after representatives from the Metro Pacific Water Investment Corporation (MWIC) revealed during the question hour of the regular session of the city council that it has already reached an agreement for a joint venture in financing, rehabilitation, upgrading, expansion, operation, management, and maintenance of the water supply network and wastewater facilities of DCWD.
Dicen explained that at present, DCWD is short of 7,800 cubic meters of water every day and is expected to reach 13,470 cubic meters after 10 years if no improvement is undertaken.
Under the proposal, in the first 10 years of concession, MWIC will undertake water supply system rehabilitation, upgrading and expansion in the amount of PHP 684,176,024.00; non-revenue water reduction projects worth PHP 110 million which includes replacement of water meters over a three-year period at PHP 160 million; wastewater management at PHP111 million, permits at PHP 95,301,125.00, for a total of PHP 1,000,477,149.00.
The concession agreement grants the Joint Venture company exclusive right as concessionaire of DCWD to take possession of use, and upgrade the existing facilities; design, construct, install, and commission the new facilities; and distribute water to DCWD end-users and customers and bill and collect payments from such customers for water services.
According to Director Cleonico Fontelo, vice chairman of the board of directors, the supply situation right now is on a flat line, prompting the board and management to consider various options, one of which is through a bank loan or a public-private partnership.
Looking at the bank loan approach is difficult to consider especially since the amount needed is in the vicinity of PHP1 billion while the DCWD’s assets are only at PHP 288 million, according to Fontelo. The maturity period of 20 to 25 years will result in high debt burden and as a consequence will result in high water rates.
The board thus decided to go on a long-term agreement under the PPP (public-private partnership) scheme because the investment recovery would be extended for a long duration, which would result in lower water rates.
Fontelo further explained there will be no interest in the amount of investment because investment recovery is based on profit, so there is less pressure on the water district with respect to payment. (/PNA)
