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MCWD employees union worries that ADB study will hike rates

/ 07:44 AM January 21, 2012

THE employees union of the Metro Cebu Water District (MCWD) voiced concern that a proposed project by the Asian Development Bank (ADB) may result in higher water rates for Cebu.

The MCWD Employees Union (MEU) held a press conference yesterday to oppose the ADB’s Urban Water Supply and Sanitation Project saying that a $400-million loan would be contracted.

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In response, Armando Paredes, MCWD general manager, said it was still “premature” to talk about any loan that may compromise the MCWD’s financial status.

He said results of the study will be released in March.

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Paredes said he is willing to meet with union officers to answer their questions about it.

Union officer Rowen Lorenzo R. Montecillo, vice president for external affairs of MEU, said that under the project, the ADB will spend $800 million for the urban water supply and sanitation project for MCWD and the Davao City Water District.

About half of the $800 million will go to the MCWD and the rest will go to the Davao City Water District.

Of the US $400-million loan for the project, about $100 million will be sourced from the ADB and the $300 million from the private sector.

Felicisimo A. Salcedo, MEU president, said they are partnering with the Alliance of Government Workers in the Water Sector (AGWWAS) and the Public Services International (PSI) to oppose the ADB urban water supply and sanitation project.

Montecillo said the water supply project will be undertaken in 11 years.

“Why not let the government handle the project? Why the private sector?” Salcedo told Cebu Daily News.

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With MCWD’s total assets of P3 billion, Montecillo said, “There is a big possibility that water rates will increase to P19 per cubic meter from P13 cubic meter in year 2015.”

It was not immediately clear, however, how the union arrived at that figure.

In a press statement, Paredes, the water district general manager, said the ADB study aims to find other water sources, improve distribution systems and installation of septage treatment facilities.

While admitting the possibility of higher water rates due to developing new water resources, Paredes said the MCWD will hold public hearings first before securing approval from the Local Water Utilities Administration for any rate increase.

“MCWD is into public-private partnership, through joint venture contracts or buying water from private suppliers, to improve its water services. But MCWD still takes care of the distribution. The customers are still ours,” Paredes said in the press statement.

He denied claims by the union that the MCWD will contract a loan to develop a new water source.

“Common sense dictates that you do not take out a loan that you cannot pay,” Paredes said.

“The MCWD management is always open to entertain them (MEU) and clarify any issues with them (MEU),” he said.

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