Trick or treat: MIWD Privatization (2)

Ted Aldwin OngWith water end-users complaining of scarce water while paying monthly average charge for 15 cubic meter in spite being unutilized, the water concern become a hot electoral issue on the road to the elections in 2010. Candidates for councilor under the Mabilog ticket took up the matter in the campaign with promises publicly issued that it will be immediately acted upon after their oath-taking as elected officials of the city.

This is partly one of the reason why the different sectors of society in Iloilo City supported Mabilog in his bid to mayoralty. But another elections had come and go and Iloilo City remains waterless.

By the time Iloilo City Mayor Jed Patrick Mabilog assumed as chief executive of Iloilo City, internal squabble between the top management officials and the members of the Board of Directors at the Metro Iloilo Water District (MIWD) was at the boiling point with both parties throwing threats of legal suit, suspension and dismissal against each other.

The infighting within MIWD was taken by the public as an internal problem that affected MIWD operations. It was misunderstood. The infighting was a manifestation of the privatization plan at work. It was a fight with outside players and influential politicians. All the moves by the Board of Directors was not at all about adopting proper policies or implementing reforms that will benefit water end-users; but, rather an assertion in the form of policy support to justify decisions geared towards privatizing MIWD.

Many people had visualized that the privatization of MIWD will have a face of a corporate entity literally marching towards MIWD and take-over the water district. It is not always the case especially on corporate take-over or buy-out. Privatization could take a face of bulk water contracting which can be operated by a separate entity like what MIWD currently have with Flo Water of the Florete Group.

What is unfolding in the water industry is a replica of what we have in the country’s power industry which likewise underwent the same privatization process.

The water district will eventually fall under the same set-up with the power industry. In Iloilo City, for instance, generation of power is operated by Metrobank’s Panay Energy Development Corp. (PEDC), and Panay Power Corp. (PPC). The distribution of electricity is operated by the dreaded Panay Electric Co. (PECO).

In the case of MIWD, the generation of water for supply to MIWD is being operated by the Florete Group – Flo Water. The water generated by Flo Water is dispatched through a transmission facility going to MIWD. While generation and supply of water to MIWD is a private venture, we must understand that MIWD as an institution remains a Government-Owned and Controlled Corporation (GOCC).

In all of these, the cost of generating water for supply plays an influential consideration. The cost alone of water per cubic meter to be offered for contract had pushed MIWD Board to a gripping conflict with the Technical Working Group of the Bids and Awards Committee. The MIWD Board had preferred for a uniformed Approved Budget for the Contract of P15.00 per cubic meter. In contrast, the TWG only recommended P9.00 to P12.00 per cubic meter. In fact, whispers within MIWD circulated then that the big boys at the Board (Trenas group) were even pushing for higher cost at P18.00 per cubic meter.

The cost are measured per cubic meter on water while it is per kilowatt-hour on electricity. Every centavo counts in both of these cases and when collected altogether could reach millions of pesos in profit.

This is the reason why the call of Iloilo City Mayor Jed Patrick Mabilog to take-over MIWD in order to improve the management did not only raised suspicion on the real intention behind the move, but it is being treated as a voice behind a separate group who is interested to somehow become like the “Cacho” of the water distribution in Iloilo City.

In essence and in substance what Mayor Mabilog is espousing is to make MIWD a PECO, a privately operated entity. It claimed that a private entity can better run the affairs of the water district and will eventually improve service delivery. This is a contradictory position considering that both power and water are essential services that did not merited attention of the city government in the exercise of its oversight and regulatory responsibility.

If you look at how PECO operates and factor in all its abusive practices, you will be jolted by Mabilog’s dangerous proposition. Many times over, the City Government under his administration had stressed (disappointedly) why it cannot act on the problems confronted by the city involving PECO. It consistently suggested that PECO is a privately-owned and protected by a congressional franchise if compared to MIWD which is a GOCC. This is the reason why it cannot intervene in the affairs of PECO.

So why make MIWD in similar set-up with PECO when it is difficult to intervene?

Moreover, the Mabilog proposition of take-over MIWD by the city government brings into the fore of public concern the management and financial capacity and technical competency of the city government to operate a water district. It does not have a long technical experience of operating institutions delivering essential services.

It is likewise a cause for concern why the call was only made today and why only on MIWD. In a separate case involving PECO, Mabilog did not support a citizen’s-led call to take-over PECO six years ago after a case was won against PECO and the Energy Regulatory Commission directed PECO to return to power end-users of Iloilo City the amount it overcharged totaling to P631-million.

The circumstances had a complete legal recipe for the city government to exercise powers to take-over provided to LGU’s by the Local Government Code by using the refundable amount as leverage to institute real reforms in the distribution company from management to its ownership structure.

To take all these concerns into account, there might be some basis to conspiracy theories drew out from the move to take-over MIWD that the City Government is nothing but a go-between. By the city government take-over, it will be convenient for a private firm to come in for there are many ways to arrange it using the powers given to the LGU.

Of course, at the back of everybody’s mind the move would mean money. Why money? Because there are four numbers in the mind of city politicians who will benefit from the move – the numbers 2-0-1-6. ###