Cebu Province secures interim water agreement with MCWD

The Cebu Provincial Capitol

CEBU CITY, Philippines – Cebu Province entered into an interim agreement with the Metropolitan Cebu Water District (MCWD) to prevent water stoppage in Cebu after the termination of a contract between CMWD and MCWD.

The official contract signing between Cebu Province and MCWD took place on Wednesday, November 29, 2023, with the agreement set to be effective from December 1, 2023, until January 31, 2024.

The termination of the CMWD-MCWD contract on December 1 would have impacted water distribution in several areas in Cebu, such as Liloan, Consolacion, Compostela, Mandaue City, Cebu City, and Lapu-Lapu City.

The termination was attributed to the Cebu Province not receiving its 19.29 percent project investment rate of return, as there has been no price increase since 2012.

READ: Capitol renews partnership with Manila water

“The CMWD is bleeding. Hemorrhaging so to speak,” said Governor Gwendolyn Garcia in a press conference on Wednesday, November 29.

CMWD is the body managing and operating the bulk water supply facility in Carmen that supplies 35 million liters of water to the Metro Cebu Water District (MCWD).

CMWD-MCWD contract

In March 2012, Cebu Province and Manila Water officially solidified their partnership through a joint venture agreement.

In this agreement, Cebu Province held a 49 percent stake as the primary investor, while Manila Water held 51 percent. This venture marked one of the pioneering public-private partnership economic enterprises for Cebu Province in 2012, standing as its flagship project with an investment of approximately 100 million.

As part of this initiative, CMWD entered into a contract with MCWD, specifying critical terms of the bulk supply agreement.

The agreement outlined a daily supply of 35 million liters, a tariff price set at 24.59 per cubic meter, and a 20-year contract duration that extends until 2034.

“We decided that [on] December 1, we [CMWD] will continue to cut off [MCWD] and the province of Cebu will come in [to] state that MCWD, ‘you will not cut off the supply.’ [The] CMWD [will] terminate the contrary,” Garcia said.

Through this arrangement, the province of Cebu would engage in direct government-to-Government-Owned and Controlled Corporation (GOCC) interaction, proposing to purchase the bulk water supply from CMWD at the same price and sell it to MCWD at the same rate.

The interim agreement would seek to bridge the gap and ensure a continuous water supply during this transition period.

“No stoppage of distribution of water [on December 1]. It is only that the contract has been terminated between CMWD and MCWD and propose a new contract will be entered into,” the governor said.

/bmjo

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