DAVAO CITY -Faced by strong opposition from consumer groups, the Davao City Water District (DCWD) refused to attend the second committee hearing of the City Council to discuss the water district’s proposed 100-million peso loan.
Instead, the management and board of directors of the water utility firm invited City Hall and City Council officials to an exclusive forum at the Grand Men Seng Hotel where they justified the 100-million loan proposal.
Lawyer Eliseo Braganza, vice-chairperson of the DCWD Board, said the 100-million peso loan is needed for the comprehensive mainline replacement program (CMRP) to reduce systems loss as a result of leakage, inadequate measurement, illegal use, and free, unaccounted uses.
DCWD plans to source out the loan from the Local Water Utility Administration (LWUA), which sources funds from the World Bank (WB), the Asian Development Bank (ADB) and Japan Bank for International Cooperation (JBIC).
“With the implementation of the project, the water district might realize a two to three per cent reduction of systems losses in the first year alone,” Braganza explained.
Each percentage point of reduction will allow DCWD to save 12.5 million pesos a year. DCWD would save 25 million pesos a year, if the water firm could bring its systems losses down to two percent, Braganza said.
In 2011, the DCWD targets to reduce systems losses by 10 percent, which could amount to a 125-million peso in savings, he said. “This is more than enough to service DCWDs debts,” Braganza said, brushing aside apprehensions that the proposed loan program will bring about a series of water rate increases. Braganza also denied that DCWD is headed up for privatization.
But the consumer group Consumer Alert! said the proposed borrowing will entail an annual spending of 15 per cent of the loan amount for the interest payment alone, aside from the 48,000 peso monthly allowance for the LWUA representative who will have to sit in the DCWD’s Board of Trustees.
Rudy Aranjuez, Consumer Alert! convenor, also said the DCWD does not need the 100-million peso loan for the completion of its expansion program.
“We have these documents ready for public scrutiny,” he said, citing a study on the DCWD’s financial standing showing that the water utility firm has sufficient source of funds for the CMRP implementation.
Aranjuez, who also chairs the DCWD employees union, said corporate losses and bloated budgeting for operations were concealed during the presentation of the company’s financial statement. “The company’s annual savings were not thoroughly discussed during the forum,” he said.
DCWD did not invite the water consumers in the forum.
The consumer group questioned the real intention of DCWD in initiating the forum. They called it a “way to influence the City Council to accept their proposal.”
Consumer Alert! urged legislators to reject DCWDs invitation, but nine councilors attended the forum.