COA: MCWD loses P117.759 million in annual revenue due to unimproved non-revenue water rate
CEBU CITY, Philippines — The Commission on Audit (COA) flagged the P117.759 million loss in annual revenue of Metropolitan Cebu Water District due to its unimproved non-revenue water (NRW) portion.
The state auditor observed that there was no marked improvement in the NRW of the water district in the past three years resulting in an annual loss in revenue by an average of at least P117.759 million.
“If not properly addressed, this will undoubtedly affect the financial viability and future operations of the water district taking into account the maintenance cost associated with the water system and other expenditures such as the salaries, wages, and other benefits as well as other dues needed to be funded out from its own operations,” reads COA’s audit report.
The annual audit report on MCWD has been uploaded to COA’s official website.
WHAT IS NRW
COA defines NRW as the quantity of water that is channeled into the water supply system but does not yield returns due to either or in combination with the following: theft, evaporation, faulty metering, poor data gathering, and especially leakage.
MCWD, for its part, told COA that they are already taking various measures to reduce its NRW rate.
The water district said that among the factors that contributed to its higher NRW rate were telco and Department of Public Works and Highways (DPWH) projects that involved drilling, which accidentally damaged some of MCWD’s underground pipes.
“These incidents resulted in leaks that took time to discover, leading to delayed repairs and actions. We estimate that we lost 3,095.74 cubic meters per day due to these incidents,” MCWD commented.
MCWD also noted that its NRW rate significantly increased to 49 percent in January 2022, a month after Typhoon Odette hit Visayas and Mindanao, including Cebu, due to widespread water pilferage and increased incidence of leaks caused by the typhoon.
The MCWD has since managed to reduce the NRW to 31 percent as of April 2023. The acceptable NRW set by the Local Water Utilities Administration (LWUA) is 20 percent of the total production.
The water district also said that they currently have a dedicated leak detection team that conducts sweeping operations across MCWD’s service area.
COA emphasized that MCWD does not receive a subsidy from the national government, “thus, its cash flows and liquidity depends wholly on the result of its operation.”
“Hence, management is expected to fully maximize revenue generation by minimizing NRW as the supply of water is the greatest source of revenue of the Water District,” COA said. /rcg
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