Cebu Province and Metropolitan Cebu Water District (MCWD) signed an interim agreement for the procurement and sale of potable water by the province to MCWD.
The agreement came after bulk water supplier Cebu Manila Water Development (CMWD) decided to terminate its contract with MCWD for the supply of 35 million liters daily (MLD) of water which started on 1 December 2023 on the grounds that the contract which had no escalation clause is grossly disadvantageous to the firm.
With the termination, MCWD will have difficulty servicing its coverage from Compostela, Liloan, Consolacion, and the tri-cities of Mandaue, Cebu, and Lapu-Lapu.
Under the agreement signed by Governor Gwendolyn Garcia and MCWD chairman, Atty. Jose Daluz III, the capitol will purchase bulk water at 35MLD from CMWD and sell it to MCWD at 24.59 per cubic meter.
Daluz told DAILY TRIBUNE that MCWD was rescued by the provincial government and the water district is very thankful.
The agreement term will be 62 days which would start on 1 December 2023 to 31 January 2024. A longer-term agreement is expected to be signed by both parties.
CMWD is a joint venture agreement between Cebu Province and Enrique Razon-led Manila Water Consortium, it collects and treats surface water from Luyang River in Carmen town.
"The Province of Cebu comes in and deals directly with MCWD in a government and GOCC (government-owned-and-controlled corporation) interaction and offer to purchase the water from CMWD at the same price and sell it to MCWD at the same price," the governor explained.
She asserted that while the capitol has undertaken this move based on legal grounds, she's also protecting the thousands of Cebuano consumers in those six Metro Cebu LGUs, who are dependent on Carmen's water supply.
It was in 2013 that the contract between CMWD and MCWD was signed at a selling price of P24.59 per cubic meter until 2035. A deal that is grossly disadvantageous to the province as it has no escalation clause amid the rising inflation rate.