DUMAGUETE CITY WATER DISTRICT: DEAL OR NO DEAL?

*Deal may lead to an increase in water rates
*Current DCWD employees might lose their jobs or replaced by new hires

SUMMARY OF ISSUES RELATED TO THE P 1 BILLION JOINT VENTURE AGREEMENT BETWEEN THE DUMAGUETE CITY WATER DISTRICT AND METROPAC

Based on the statements of the officials from MetroPac Water Investments Corporation before the City Council and as embodied in the proposed Joint Venture Agreement which was ACCEPTED by the Board of Directors of DCWD and General Manager Esperato Dicen on July 6, 2017

1. Will the proposed Joint Venture Agreement result in the privatization of the Dumaguete City Water District?

Under the proposed 25-year joint venture agreement approved by DCWD Board of Directors on July 6, 2017, the new Joint Venture Corporation, a private corporation, will be the controlling shareholder at 80% while the DCWD will be left with just at least 20% share.

2. Will the employees of DCWD be retained by the new joint venture corporation?

Jonet Sanalila MetroPac Project Manager for the Visayas said that the new Joint Venture Corporation may absorb existing “QUALIFIED” regular employees or hire new workers, whereas CASUALS have no certainty to be rehired while all the Job Order workers will be TERMINATED by the new management. The regular DCWD workers will lose their security of tenure or seniority once the new Joint Venture Corporation takes over.

3. Will the water rates increase as a result of the joint venture agreement?

The new Joint Venture Corporation controlled by MetroPac “will charge the consumers a fee at a rate to be recommended by the corporation itself. The tariffs shall be adjusted as may be authorized under applicable law and the price of escalation mechanisms set out in the concession agreement.”

4. Can MetroPac use the existing and new facilities as collateral for loans?

Page 29 of the proposal duly accepted by DCWD states that: MetroPac without the need of obtaining consent from DCWD assign or transfer all or any of its rights and benefits (including existing and new facilities) to lenders and or other persons providing financing to the project.

5. Is there a lack of transparency and/or inordinate speed in the consideration and approval of the terms in the joint venture agreement?

Despite the initial denial of the DCWD officials of the existence of an agreement in its reply-letter to the City Council on January 12, 2018, the certification of the Chairman of the Board of Directors Rodrigo C. Lagahit Sr. dated August 24, 2017 stated that “DCWD and METROPAC WATER INVESTMENTS CORPORATION have reached an AGREEMENT in respect of the MWIC’s UNSOLICITED PROPOSAL to undertake the Dumaguete City Water Supply and Wastewater Management Joint Venture Project…”

It was also belatedly made public, that the proposed 25 years joint venture agreement to the tune of P 1 billion was offered on June 23, 2017; deliberated and approved by the Board of Directors on July 6, 2017 or in just 13 days!

Thanks to the City Councilors of Cagayan De Oro City, one of whom, Councilor Reuben Dok Boboy Roa Daba with his Atty. James Judith told the City Council of Dumaguete, that based on their experience, when MetroPac took over the water district of CDO, the water rates to increase from P8.00 per cubic meter to P 16.00 per cubic meter at present. They urged the city government to oppose the proposed joint venture for the good of the consumers.

Let us all remain vigilant!