The contract between the Cagayan de Oro Water District (COWD) and its bulk water supplier was ‘disadvantageous’ to the water district, a former COWD manager and a former city councilor said.

 

Former COWD manager Engr. Rachel Beja and former city councilor Enrico Salcedo gave this assessment during the first of a three-day inquiry into the contract between COWD and Cagayan de Oro Bulk Water Inc. (COBI) held at the City Council session hall on Tuesday.

 

The inquiry was spearheaded by Councilor James Judith II, who was assigned to chair a fact-finding committee into the issue by a task force created by Mayor Rolando ‘Klarex’ Uy.

The task force was also tasked to find solutions to the water rate payment dispute between COWD and COBI after COBI issued a fourth disconnection notice to COWD late last month.

 

During Tuesday morning’s inquiry, Engr. Beja told the fact-finding committee that she wanted some provisions of the contract clarified. ‘I think the term that (I was trying to point out) was that it appeared that (it was a trading agreement). And my point is that it would place COWD (at a disadvantage),’ Engr. Beja said of the contract.

 

She said while the contract was termed a bulk water supply agreement, ‘the details and fine print’ state that COBI would either ‘buy or rent out’ for the purpose of supply bulk water to COWD.

At the heart of the dispute between COWD and COBI was the P426 million collectibles charged by COBI to COWD as of last February.

 

Under the contract signed in 2017, COBI would charge an incremental P3.97 increase to COWD every three years following the initial P16.60 rate it charged at the start of the contract.

 

But COWD general manager Antonio Young said during a recent adhoc committee meeting at the City Council that their board disapproved the increase owing to the economic slowdown caused by the COVID-19 pandemic.

For his part, Salcedo said he pushed for a review of the COWD-COBI contract during his stint in the City Council.

 

Salcedo said he, along with the late councilor Teodulfo ‘Bong’ Lao and former councilor Reuben Daba also filed a resolution asking the Commission on Audit (COA) for a copy of the audit report on the disallowances it issued to another COWD bulk water supplier Rio Verde Water Consortium Inc.

 

‘We also filed a resolution asking COA to review the contract between COWD and (COBI majority owner) Metro Pacific,’ he said.

 

Engr. Beja said the COA audit report described the signed contract between Rio Verde Water Consortium Inc. and COWD in 2007 as ‘onerous’ since it didn’t follow the conditions of the original contract bid out by the COWD. The disallowances eventually led COWD to sign the joint venture agreement for the creation of COBI with Metro Pacific. (Stephen Capillas of City Information Office)