12% Rate Hike: Higher cost of piped water in Metro Cebu approved

By: Jose Santino S. Bunachita September 03,2014 - 08:26 AM

A 12 percent rate hike in Metro Cebu water supply will finally take effect in January next year.

While consumers tried to appeal for a moratorium in a Cebu City Council public hearing earlier this year, the adjustment was approved by the Local Water Utilities Administration (LWUA).

The bulk of household consumers who use less than 10 cubic meters a month, will pay P15.20 per cubic meter instead of P13.60 to the Metro Cebu Water District(MCWD) next year.

One cubic meter is equivalent to five barrels of water or 1,000 litres.

“The rate hike is effective on January next year,” said MCWD Acting Assistant General Manager Astrophel Logarta during yesterday’s 888 News Forum.

As Cebu Daily News reported in its March 11 issue, the new rate were virtually a “done deal”.

BULK WATER

The rate increase was part of the terms of a bulk water supply contract tapping the Carmen River in north Cebu, a new infrastructure project.

This major investment involves the Cebu Manila Water Development Inc. which is a joint venture between the Manila Water Consortium and the Cebu provincial government.

Under a contract with MCWD, the consortium will supply 18,000 cubic meters worth of river water for the first year. This will increase to 35,000 cubic meters on the second year.

MCWD is largely dependent on pumping water out of ground wells, whose aquifer is already strained from demands of an increasing population and economic activity.

The surface water is expected to ensure a bountiful supply and ease complaints of low water pressure or interrupted service in the metropolis.

FIRST YEAR ONLY

In their rate hike application, MCWD was supposed to impose another 12 percent increase by 2016 and another round in 2017.

However, LWUA’s conditional approval only applies for the first year.

“Yes, only the first 12 percent was approved, which is about P1.60 per cubic meter for the first 10 cubic meters or 33 centavos per drum,” confirmed MCWD Acting General Manager Ernie Delco.

“Other LWUA conditions include non-revenue water, collection efficiency and CAPEX (Capital Expenditures) utilization,” Delco added.

Since the MCWD has around P1 billion in the bank, Delco said LWUA, the government regulator of water utilities nationwide, wants MWCD to implement expansion projects that are part of the CAPEX.

“LWUA as a regulator wants to make sure that the water district really needs the increase. That’s how difficult it is to get approval for rate adjustments. We have to be very efficient,” Delco added.

The last rate increase by MCWD was done in 2006.

With the increase in January 2015, each cubic meter will cost P15.2 for first ten cubic meters; P16.8 for 11-20 cubic meters; P20.16 for 21-30 cubic meters and P53.76 for the more than 31 cubic meters of consumption.

MORE WATER

The water district’s application was “approved in principle”. MCWD is just waiting for a formal notice this week.Logarta said they confirmed it with LWUA personnel two weeks ago.

The infrastructure for the bulk supply is almost complete.

“Among the requirement of the contract is for a reservoir to be constructed. But since it’s not yet done, they will have to temporarily inject supply to our main injection points in Compostela and two in Liloan,” Logarta explained.

Once the formal notice from LWUA arrives, Carmen river water can be immediately be supplied.

The contract for the Carmen water supply is effective upon LWUA approval, not when the rate hike is implemented.

“Our target date is actually around this time but the supplier is experiencing some delay in their pipe laying. They issued last month a certification to LWUA that they would be ready by end of August but recently they said they are encountering delays. MCWD is ready to accept the required volume any time,” Delco said.

EXPANSION

Meanwhile, Logarta said several MCWD expansion projects remain unimplemented in Mandaue City, Consolacion town and Mactan Island due to problems of right of way acquisition.

“We have P600 to P700 million worth of expansion projects that are still not implemented due to acquisition of excavation permits from the DPWH and the local governments,” Logarta said.

He said a Department of Public Works and Highways (DPWH) policy prevents excavations in national roads.

“We need to excavate to lay our pipes. We’re hoping that the DPWH will be lenient with us on this since we’re serving utilities and we’re both in government,” Logarta said.

Related:

12% RATE HIKE AHEAD

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TAGS: Cebu water, Local Water Utilities Administration, MCWD, price hike

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