MCWD didn’t apply for any $400-M ADB loan
THE Metropolitan Cebu Water District did not apply for a loan worth $400 million neither would it do so because the utility is not capable of paying this.
MCWD general manager Armando Paredes assured this during a public hearing yesterday.
Councilor Alvin Dizon called for the public hearing after the MCWD employees’ union (MEU) and the Freedom from Debt Coalition (FDC) told the media that MCWD is applying for a $400 million loan with the Asian Development Bank.
The MEU and FDC said the loan would mean an increase in water rates and may lead to bankruptcy and privatization of the water district.
Abigail Almeria, MEU vice president, said they learned about the water district’s loan from the ADB website which said it was approved on April 4, 2011.
But Paredes clarified that the water district has not filed any loan application.
What he signed was a Memorandum of Agreement with ADB for a study that it is conducting for the water district.
Paredes stressed that the study is a $2.2 -million grant for MCWD and the Davao City Water District.
It aims to find other water sources for both water districts, improve their distribution system and put up of septage treatment facilities or sewerage system to protect the water resources.
Findings of the study will be presented in May.
Paredes said that it would be “crazy” for a financial firm to grant MCWD a loan worth $400 million on P17 billion when the water district’s equity is only about P1.7 billion or just one-tenth of the loan amount.
Vice Mayor Young said he believes MCWD is not capable of repaying a $400-million loan.
Young asked Paredes to write ADB officials and clarify what was posted on its website.
Victor Chiong, president of the Alliance of Government Workers in the Water Sector told the council that MCWD’s previous loan experience should serve a lesson for the management and should discourage them from considering another loan.
Chiong said MCWD availed of a P700-million loan with ADB in the 1990s to establish 15 pumps in Compostela town, but the project failed.
Vice Mayor Young, however, told Chiong that ADB should not be blamed for this as the failure of the project was the fault of the municipal government of Compostela which refused to allow a pumping station and well in its locality. /Chief Of Reporters Doris C. Bongcac
