Palawan governor offers 200K-liter bulk water supply projects in north, south Cebu

Palawan Governor and businessman Jose Chavez Alvarez meets with Governor Gwendolyn Garcia to express his company’s interest to enter into partnership with the provincial government for the development of bulk water production supply in Cebu. (Screengrab from PIO)

CEBU CITY, Philippines — Palawan Governor and businessman Jose Chavez Alvarez has manifested his interest to take over the bulk water supply production project in Carmen town following the termination of Cebu province’s joint investment agreement (JIA) with Manila Water Consortium Inc. last December 11.

Governor Gwendolyn Garcia invited Alvarez at the Capitol last week to discuss a possible partnership for the development of more bulk water supply production for Cebu province.

Read More: Garcia ends Capitol’s joint investment deal with Manila Water

“When they (Capitol and MWCI) will disengage and the governor (Garcia) will call me whether I can take over, I will look at it (the proposed bulk water supply production project) favorably,” Alvarez was quoted as saying in a news release by the Cebu Provincial Information Office (PIO).

In 2011, Alvarez’ Cebu Bulk Water Resources Inc. (CBWRI) placed a bid for the joint investment project for the development of a bulk water supply facility that will tap the surface water of Luyang River in the municipality of Carmen in northern Cebu.

Although Alvarez put up the lowest bid with a tariff rate of P13.95 per cubic meter of water and a project internal rate of return (PIRR) of 19.26 percent for the province, CBWRI lost the project to MWCI through a Swiss challenge.

Read More: Manila Water bags P700M Cebu water project

MWCI initially offered a tariff of P24.90 per cubic meter and PIRR of only 14.5 percent.

Because the bulk water project was originally proposed by MWCI, the company was allowed to match CBWRI’s proposal.

The project was on a 49-51 percent investment sharing between the capitol and MWCI, respectively.

Last August 29, Garcia issued a Notice of Breach to MWCI as a result of five alleged unauthorized changes in the terms of the joint investment agreement. She gave MWCI 90 days or until November 27 to cure the breaches.

Read more: Garcia gives Manila Water 90 days to explain, cure ‘breaches’ in joint investment deal

These breaches include the increase in the Capital Expenditure (Capex) from P702 million to P1.003 billion; increase of tariff rate from P13.95 per cubic meter to P24.59 per cubic meter; decrease of the projected internal rate of return from 19.23 percent to 12.30 percent; non-remittance of the province’s receivables; and the plowing back of the Capitol’s earned revenues to the Capex of the project.

On December 11, the Capitol formally junked the JIA with MWCI due to the uncured breaches.

But Garcia said she has yet to discuss with the head of MWCI on how to go about the bulk water production facility after they already part ways.

Aside from the Luyang River project, Alvarez said that he was also interested in putting up two more bulk water production projects to already include southern Cebu.

“This project in Carmen is only (producing) 35,000 (cubic meters of water per day). I am proposing to the governor to supply another 100,000 from the north and another 100,000 from the south,” Alvarez said.

Alvarez added that his company was willing to also assist the Capitol in  putting up of water systems in all the 1, 093 barangays in the province. / dcb