Probe of private sector’s ‘takeover’ of water districts sought

SAN FRANCISCO, Agusan del Sur, Philippines — Officials of two local water utilities in the Caraga region have asked the Senate and the Office of the Ombudsman to investigate the Local Water Utilities Administration (LWUA) for allegedly laying the ground for the takeover by private groups of the country’s water districts.

In a complaint letter sent to Ombudsman Samuel Martires and Sen. Richard Gordon, Elmer T. Luzon and Anselmo L. Sang Tian accused LWUA Administrator Jeci A. Lapus of “tweaking” several policies of the agency to favor the entry of mostly water distribution giants in the operation of water districts in the name of public-private partnership.

Luzon, general manager of San Francisco Water District based here, and Sang Tian, general manager of Butuan City Water District, said these partnership deals, which had already been undertaken by some 100 of more than 500 water districts in the country, were “grossly disadvantageous” to water concessionaires.

The complaint said these deals had taken away from the water district its core functions (operation, maintenance, and billing and collection) and had “devolved” these or were allowed to be taken over by private partners.

Luzon and Sang Tian also said the entry of a private partner out to make profits had confused the public service mission of the water district.

They argued that water districts should remain nonprofit government institutions.

Luzon and Sang Tian called for the probe of the legality and “justness” of such arrangements, which they said had been “proliferating rapidly,” among water districts in the country.

Prime Water, 76 partnerships

A list provided by the two officials showed some 76 concession-type partnerships between water districts and private partners throughout the country, 63 of which involved Prime Water Infrastructure Corp., a firm controlled by the Villar family.

The 76 water districts accounted for some 1.34 million service connections or about 6.7 million water consumers.

According to its website, Prime Water supplies more than 500,000 households with 300 million liters of treated water daily from deep wells and surface water sources it operates. The Inquirer learned that Prime Water is also among the companies pushing for a concession agreement with both San Francisco Water District and Butuan City Water District.

Local water districts are the primary water service providers in many cities and municipalities in the country. Since local water districts are government-owned and -controlled corporations, they are subject to annual audits by the Commission on Audit (COA). Some of the reports of the COA flagged Prime Water’s inefficiency and poor service.

Luzon and Sang Tian noted that over the past two years of Lapus’ watch as LWUA chief, some 60 water districts had been in various levels of talks with private partners with little assistance from the agency that supposedly regulates their operations.

Executive Order No. 68 series of 1999 mandates the LWUA to help water districts review proposed ventures with a private partner, the complaint said.

The LWUA is represented in the water district’s joint-venture selection committee, the main platform for it to provide technical assistance.

Instead of helping, Lapus has deprived the water districts of the needed technical advice by banning the travel of designated LWUA representatives since June 22, 2017, according to Luzon and Sang Tian.

But Lapus, in his Dec. 6 letter to Elpidio Vega, government corporate counsel, said the LWUA was not a party to joint-venture agreements entered into by water districts.—With a report from Inquirer Research