Back to the Streets in Bacolod
Water consumers slam corruption; warn of disaster

It’s back to the streets in the Negros Occidental capital as water-harassed consumers revive their ‘Friday three-o’clock habit’ against the local water district’s insistence to increase water rates. 

By Felicisimo H. Manalansan
Bulatlat.com

Alejandro Deoma, one of the convenors of the Bacolod Consumers Against Unjust Water Rate Increase (BCAUWRI), says they will go all the way to blocking collectors of the Bacolod City Water District (BACIWA) as the latter implements by the end of January the first among a series of water rate hikes which consumers have been opposing since June last year.  

Consumers of water in Bacolod City are currently burdened by what could be the highest water rate in the country at P37.86 per cubic meter (cu.m.)  Yet BACIWA is further poised to hike water rates by as much as 34 percent more, claims Deoma.

The water rate increase in Bacolod is a vastly unpopular issue in this Visayan city where more than 40 percent of its residents are inadequately served by the local water district. Most of the people here, says Deoma, are opposed to the water rate hike which they view is not about improving the services of BACIWA, the local water district. The increase instead, Deoma claims, is all about BACIWA’s Phase 3 project involving an “onerous” P537 million loan to the Local Water Utilities Administration (LWUA) “that will only abet the corruption and mismanagement of BACIWA while burdening consumers with unconscionable and unjust water rate hikes.”

Deoma further reveals that the BACIWA Phase 3 Project with LWUA may eventually lead to the privatization of the water district. This is allegedly due to a clause in the BACIWA loan agreement with LWUA allowing the latter to sell the former in the event of loan payment default by the water district.

Moreover, Deoma fears that the BACIWA water project could unleash a chain of ecological disasters in the Negros Occidental capital. “As the water district maps out a plan to embark on numerous ground drillings around Bacolod city, fears are being raised about possible contamination of the city’s ground water and massive soil erosion that could cause the surface land of Bacolod to collapse,” he says.

All these, Deoma says, they could not have been discovered if it were not for a series of protest actions organized last year by BCAUWRI.

Friday 3 o’clock habit

What began as a month-long weekly Friday 3 o’clock protest actions in front of the BACIWA office last June has become a popular move among residents of Bacolod City opposing BACIWA’s Phase III project loan with the LWUA.

The controversial BACIWA project loan with LWUA, a government lending corporation for local water districts, is a P537.614 million loan ostensibly for expanding and upgrading the services of the water district. The loan is a part of the 20^th Yen Credit Package which the Philippine government obtained from Japan’s Overseas Economic Cooperation Fund (the OECF is now renamed Japan Bank for International Cooperation or JBIC).

As a result of the Friday afternoon protest actions, Deoma says BACIWA was forced to hold a series of dialogue last June and August with BCAUWRI along with  representatives from the local Sangguniang Panglungsod, church leaders and other concerned sectors. Through these dialogues, oppositors of the water rate increase were able to unearth BACIWA’s Phase 3 project which BACIWA’s board members at first denied existed.

“They tried to bamboozle us with their deceptions but BACIWA’s own records which were glaringly staring us at the (BACIWA) bulletin board eventually made the board admit the existence of the controversial P537 million loan,” says Deoma.

Mismanaged

Deoma asserts that there is no need for the BACIWA phase 3 loan. He explains that despite claiming the same reasons for previous phase 1 and phase 2 loans of the water district, BACIWA was never able to solve the water problems in the city where until now only 60 percent of residents have access to water.

Deoma says that the unavailability of water for 40 percent of Bacolod is rooted in alleged corruption and mismanagement of the water district. He cites for instance the priority for water connections being given by BACIWA to high-end subdivisions and commercial establishments.

Also, he says Baciwa tries to justify the phase 3 project because of “spaghetti” connections that contributes to about 16,000 cu.m. of water loss everyday. “Baciwa wants us to believe that they need the loan to put some order on the so-called spaghetti connections which they themselves put up,” Deoma says with a note of frustration. 

Moreover, Deoma says Baciwa is still paying for two previous loan projects. In the first phase, BACIWA received from LWUA P62.72 million for the construction of nine  deepwells, a 2.6 million gallon reservoir and 150 kilometers of pipeline. In 1984 and 1987 to 2003, BACIWA only constructed 8 deepwells, a 113 cubic meter elevated tank and 113 km of pipelines.

In BACIWA’s phase 2 project, it was granted P63.287 million funding for five deepwells, and 82 km. pipeline. For this project, BACIWA only funded three deepwells, and two elevated tanks.

In Phase I, Baciwa still has a total of P23.74 million unpaid balance, which is scheduled to mature on June 2007. In the Phase II loan, as of July 2003, Baciwa’s arrears, inclusive of interest payments, have evidently gone higher than its principal obligation at P109.177 million. The water district has to fully pay this loan on August 2018.

“It is a cause of consternation for Bacolod’s consumers why BACIWA needs to contract another loan and at an even higher amount, when it is still saddled with the payment of millions of loans in the phase 1 and 2 projects,” says Deoma.

Deoma’s allegations of corruption and mismanagement of the water district is shared by Bayan Muna partylist Rep. Siegfred Deduro. In a privilege speech at the House of Representatives last Jan. 19, the latter urged Congress to conduct an inquiry regarding the operations of the water district, particularly the details of BACIWA’s Phase III loan project, which he noted was “cunningly obtained” by the water district.

He noted how Baciwa, in coordination with LWUA officials in 1997, deceived residents whom the latter invited in a barangayan, and then made them sign a notice for allegedly having received the invitation, but whose signatures were later used by the water district supposedly as endorsers of the phase 3 project. 

Deduro likewise called attention to many “irregularities” in previous transactions of Baciwa, an allegation which the Commission on Audit (COA) validated in its 2002 report. In the COA report, the government’s auditing institution found that Baciwa officers and employees availed themselves of more than P965,000 in cash advances without first liquidating previous advances. The COA noted that this is in violation of Section174 of the Government Accounting and Auditing Manual.

The COA auditors also found that Baciwa board members were granted allowances amounting to P106,965 without legal basis. It added that some P3 million of remaining work items under the water district’s phase 2 project still remain uncorrected.

Deduro also asked in his speech why of some P46 million in Baciwa’s budget in 2003, P39 million were just placed in “short term investment.” “Baciwa has to explain why this amount is not being used to fund the expansion of water services so that it would not have to resort to obtaining huge loans,” he said.

The Bayan Muna representative also called for an investigation of similar on-going projects by different water districts throughout the country. These projects, also part of the 20^th OECF Yen Credit Package which LWUA obtained, are: P171.75 million for Batangas City; Lipa City, Batangas, P354.11 million; metropolitan Quezon province, P410.82; Masbate/Mobo,P134.34 million; San Fernando, Pampanga, 155.57 million; and Tarlac, Tarlac, P192.63 million.

Anomalous  

There are only two reasons that Deoma can think of why Baciwa is being secretive about the P537 million project loan, of which about 25 percent to 35 percent has been spent by the board. One is that the loan in itself is “anomalous,” he says. Another is that the loan will be used to shortcut the privatization of the water district, while further burdening consumers with water rate hikes. 

Deoma says that of the total P537 million loan, only a little more than half of the amount will be used for actual civil works projects. A substantial part of the remaining half, he adds will be for the consultancy fees of Japanese experts who come as “strings attached” to the JBIC loan. On this, Deoma adds that the Japanese experts do not really engage on anything substantial, citing their similar experiences in the past when a bunch of Japanese descended on their province only to conduct ocular inspections for a few days.

Deoma also says that even while Baciwa has refused to divulge the details of its phase 3 project, BCAUWRI is already smelling some shady deals being transacted by the water district. Recently, he says, Green Asia, a company contracted by Baciwa for the purchase of steel pipes, returned P79 million to the water district from a P293 million granted to the company for the same purchase. According to the company, it returned the amount because the cost of steel pipes has allegedly increased. This resulted in a rebidding in which Italit Corporation was granted the project at a cost of P161 million.

Whatever happened to the remaining P214 million that Green Asia did not return or why all of a sudden Baciwa consented to adding another P82 million to the P79 million returned by Green Asia for P161 million steel pipes from Italit Corp. are questions, however, that remain a mystery for Bacolod residents. 

On the other hand, there are indications, according to Deduro, that Baciwa and the LWUA are really after privatizing the water district. Quoting a part of Baciwa’s loan contract with LWUA to the effect that LWUA will take over the water district for eventual transfer to a third party “without the necessity of judicial processes” in the event that Baciwa accumulates a six-month period of failure to remit its loan duties, Deduro asks: “Is this not paving the way for privatization of water services in Bacolod City?”.

Furthermore, Deduro, in his speech, predicts that Baciwa will not be able to remit P5.8 million per month or P69.96 million per year as part of the latter’s loan obligation for the P537 million loan. “Based on Baciwa’s realistic cash flow projection prepared by LWUA, Baciwa will most likely fail to meet its financial obligation unless it will impose a series of water rate increases,” he says.

In 2003, Baciwa incurred a net cash outflow of P82.797 million. For this year, Baciwa is expected to further incur a deficit of P62.89 million.

Aside from its monthly loan amortization, Baciwa is likewise obliged to maintain an operation and maintenance reserve of P328.868 million or a capital reserve of 10% of gross receipts

Disasters ahead

Aside from bracing themselves for intensified protest actions as Baciwa intends to collect higher water rates before the month ends, Bacolod city residents have likewise grown anxious over environmental concerns as Baciwa pursues its Phase III project.

Already, fears about the potability of water in several city districts is worrying not a few Bacolod residents. Complaints about leaking and dilapidated pipelines have become common especially in urban poor areas. But Baciwa seems not a bit bothered. It has even put up a well in Barangay Feliza, near a company producing batteries inside an industrial zone. This could definitely contaminate the groundwater in the area, says Deoma.

Also, simultaneously drilling several parts of Bacolod City for the construction of deep wells could cause severe weakening of the city’s ground foundations, warns Deoma, adding that through time, Baciwa’s projects could have a devastating impact on their environment. 

Deoma wryly notes, however, that while Bacolod has other alternative water sources, Baciwa insists on over-exploiting groundwater sources because “this is where JBIC money flows.” Bulatlat.com         

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