Requisite to rate hike approval MCWD to spend P800M for pipeline improvement

CEBU, Philippines – As water rates in Metro Cebu area is expected to increase by 12 percent next year, the Metro Cebu Water District says it would be spending at least P800 million this year for pipeline expansion.

MCWD General Manager Ernie Delco said the expansion was one of the conditions that the Local Water Utilities Administration asked from the water company before the proposed rate hike was recently approved.

After the approval of the cost hike, LWUA has imposed conditions such as non-revenue water, collection efficiency, building of more water connections, expansion of services and the use of capital expenditures.

"LWUA, as a regulator,  wants to make sure we are efficient before we are allowed to implement new rates," he said, particularly pointing out that a big portion of the revenues to be generated would be invested in pipeline expansion projects.

"Basically, the increase is necessary since we need to expand our services," Delco told The FREEMAN yesterday.

The official also revealed the increase was supposed to be approved already since 2005, but LWUA imposed a condition that MCWD should adhere to a bulk supply of water.

"At that time, however, the bulk supply did not materialize so we did not implement the increase," he added. "It has already been seven years since our last water rates increase."

Last year, the MCWD signed a bulk supply deal with Cebu Manila Water Development, Inc. which is joint company between the Manila Water Consortium and the Cebu provincial government.

Delco explained the said agreement has required the CMWD to supply MCWD an 18,000 cubic meters of water sourced from a river in Carmen town in the first year, and up to 35,000 cubic meters the next year and onward.

"The supplier is supposed to start delivering upon tariff approval of LWUA, but we are still awaiting the LWUA formal notice," he noted.

While several consumers and homeowners associations have expressed their opposition to the rate hike, Delco said the water company has "to survive in order to make water supply sustainable."

"Anyway with the water rates increase, the price to the poor is one of the lowest in the country and will still remain subsidized," he further said.

Currently, consumers of the water company are charged of P136 service fee for the first 0 to 10 cubic meters of water used.

Starting January next year, the additional cost will increase to P16.80 from P15 for the next 11 to 20 cubic meters; and another additional fee for use of 21 to 30 cubic meters of water will hike to P19.70  from P17.60  before.

The new rate is equivalent to 32 centavos per drum (200 liters).

In addition, the water supplier currently serves residential and commercial consumers of the cities of Lapu-Lapu, Cebu, Mandaue and Talisay and the towns of Liloan, Consolacion, Cordova and Compostela.