Palawan Gov. Jose Alvarez was charged before the Office of the Ombudsman on Wednesday over alleged irregularities in the Cagayan de Oro Water District (COWD) with the private water supplier, to which he is connected.
Private complainant Michelle Fox of San Vicente, Palawan, filed two complaints that accused the COWD board of making accommodations in favor of water provider Rio Verde Water Consortium Inc. (RVWCI).
One of the allegedly “onerous” accommodations supposedly allowed RVWCI to change the parametric formula and allow it to overcharge water consumers by as much as P1.46 per cubic meter.
“The anomalous transaction and activities have greatly prejudiced and damaged the resident of Cagayan de Oro as well as the general public. Public funds and interests have also been irregularly used and utilized,” Fox said in her complaint.
She sued Alvarez as an incorporator of RVWCI, the contractor that treats water from the Bubunauan River and delivers it to the COWD. Also named respondents were four other RVWCI executives: Fiorella Azura, Bienvenido Santos, Roberto Lozada and Chona Alvarez.
Public respondents belonging to the COWD were: vice chair Federico Gapuz, secretary Raymundo Java, treasurer Sarah Borja, assistant secretary/treasurer Sandy Bass Jr. and board chair Francisco Mendez.
They were accused of violating the Government Procurement Reform Act, the Anti-Graft and Corrupt Practices Act, the Government Auditing Code of the Philippines, and Commission on Audit Circular 85-55A on irregular expenditures and two other COA resoutions, as well as grave misconduct and gross neglect of duty.
Fox’s complaint simply lifted entire segments of the COA Report No. 2013-002, or the “Report on the results of the audit on alleged graft and corrupt practices of the Board of Directors together with the contractor, Rio Verde Water Consortium Inc. of the Cagayan de Oro Water District, Cagayan de Oro City, and the then-LWUA [Local Water Utilities Administration] Administrator.”
The said COA report flagged various provisions allegedly inserted by RVWCI in the December 2004 bulk water supply agreement. State auditors deemed these provisions “onerous” compared to the original terms in the “model contract” for the project.
Besides the tweak to the formula that purportedly allowed overcharging, the report cited how RVWCI modified the bases on the frequency of water price adjustment.
The project also allegedly became costlier by P47.96 million, after the COWD board agreed to RVWCI’s proposal to change the original take-off point of the delivery to a location that is lower in elevation.