Cagayan de Oro legislature calls for LWUA withdrawal from water district

CAGAYAN DE ORO, Philippines – The city council passed a resolution calling on the Local Water Utilities Administration (LWUA) to refrain from managing and operating the troubled Cagayan de Oro Water District (COWD), based on a legal opinion issued by the Department of Justice (DOJ) regarding its takeover.

Ten Cagayan de Oro councilors voted in favor of Resolution No. 2024-781, while five objected on Monday afternoon, July 8.

The resolution urged LWUA to heed the DOJ opinion and withdraw the appointment of interim officers tasked with addressing the water district’s unresolved debt dispute with its primary bulk water supplier and other issues such as its high non-revenue water (NRW).

On June 18, the DOJ released an opinion signed by Justice Undersecretary Raul Vasquez, stating that LWUA can only take over if a local water district defaults on its loan payments to the regulatory body, citing sections 36 and 61 of the Provincial Water Utilities Act of 1973.

The DOJ opinion triggered louder protests in front of the COWD office, with demonstrators calling LWUA’s intervention “illegal.”

However, the DOJ clarified in its document that the Office of the Government Corporate Counsel (OGCC) has primary jurisdiction over the queries, and its legal views were based on questions posed by LWUA Administrator Jose Moises Salonga.

Cagayan de Oro Councilor Christian Rustico Achas, who opposed the city council resolution, argued that the DOJ document is not binding and could escalate tensions, especially among protesters.

Over local broadcaster Magnum Radio on Wednesday, July 10, Achas said a regional court already ruled against a petition that questioned the LWUA takeover.

“The court’s decision is legally binding,” he said.

Another councilor, James Judith II, said LWUA officials couldn’t seem to get their act together. He noted that Salonga sought the DOJ’s legal opinion after LWUA Chairman Ronnie Ong had already installed interim officials in COWD, based on the LWUA Board of Trustees’ May 17 resolution approving the contentious takeover.

“It became chaotic because LWUA insisted on appointing an interim board and interim general manager,” Judith, the author of the city council resolution, told reporters.

Lawyer Proculo Sarmen, the leader of the consumers’ watchdog Community Alliance for Water Supply Action (CAWSA), said the DOJ’s views did not “comprehensively address all circumstances pertaining to the regulatory and supervisory powers of LWUA under PD 198.”

Sarmen said a water district’s failure to meet financial and operational obligations, such as debt repayment or ensuring adequate water services, is crucial.

Before LWUA’s intervention, COWD had an unresolved dispute with its primary supplier, Cagayan de Oro Bulk Water Incorporated (COBI), over a P400 million debt claim, leading to a brief supply disconnection on May 14.

Ong cited COWD’s high NRW, which was 49.08% as of 2023, as a basis for the takeover, saying that addressing NRW was part of a finance assistance contract between COWD and LWUA.

Meanwhile, Councilor Achas alleged that the Bantay Tubig Movement (BMT), one of the groups protesting outside COWD, had political motivations.

Feeling alluded to, BMT lead convenor Enrico Salcedo, a former councilor and head of the city hall’s night market team, dismissed Achas’ claim, saying he had questioned the 2017 COWD-COBI contract for years.

Salcedo said his group was calling for the contract to be rescinded or amended to remove a provision allowing COBI, controlled by business tycoon Manny V. Pangilinan, to adjust its water rate every three years.

According to Salcedo, the clause meant increased water rates in Cagayan de Oro every three years, which the BTM sees as disadvantageous to consumers. – Rappler.com