The private sector’s takeover of water districts often results in job losses to government employees, something that worries the Local Water Utilities Administration (LWUA).
LWUA Administrator Jeci Lapus said that because of the joint ventures (JV) between private companies and state-owned water districts, a lot of government employees employed by the latter are losing their jobs. He said this in the context of discussing the controversial takeover of Prime Water Infrastructure Corp., a company owned by the family of Senator Cynthia Villar, of several water districts in the country. He revealed that Prime Water already took over 100 of the 500 water districts in the country.
“LWUA used to be part of the evaluation committee [of these JV deals] but not during my time anymore. Prior to my time, the revised NEDA [National Economic and Development Authority] guidelines was finished and LWUA is now just an audience observer. That is why I stopped sending staff [during the deliberation of the deals] since the OGCC [Office of the Government Corporate Counsel] told us, too, that we don’t have the right to evaluate,” Lapus said during the ‘Wednesday Forum at Lido’.
LWUA is a government-owned and controlled corporation (GOCC) mandated by law to promote and oversee the development of water supply systems in provincial cities and municipalities outside Metro Manila.
But based on NEDA’s revised guidelines and procedures for entering into JV agreements between government and private entities, the approving authority for infrastructure and development projects like water supply should be the NEDA Board Investment Coordination Committee (ICC).
And because LWUA is just a “mere observer” in evaluating these JV deals, Lapus said his agency couldn’t do anything about the water districts employees.
“[Because of these deals] permanent employees registered in civil service were sacked because the position became redundant. It is government becoming private,” Lapus said.
“The NEDA guidelines don’t say ‘fire government employees’ but we [LWUA] is just a regulator, and I just hope that whoever does the contracts, they should have sided with the employees who are about to lose their jobs. Now, our problem is that this worsens unemployment,” he added.
Lapus further noted that a JV can only be entered into between a water district and a private company when the former already ran out of funding options for its expansion.
But, the problem is that equity sharing is becoming just an ‘after the fact’ thing, he added.
“What will normally happen is that a private company will submit an unsolicited proposal. A board can enter into an agreement with the private firm if they need an expansion that can’t be funded by LWUA or the government. That is just okay,” Lapus said.
“But what happens is that the JV partner will only submit a business plan but there is no equity sharing being discussed. And then, we will see that upon signing, all the receivables [of the water district] will go to the partner,” he further said.
After finding out that Prime Water already took over 63 water distribution units in the country, Senator Richard Gordon said in 2019 that he wanted LWUA investigated for allowing the privatization of the country’s water districts.
In October of last year, multi-sectoral consumer group Amlig Tubig opposed the P6.3-billion JV agreement between the Bacolod City Water District (BACIWA) officers and Prime Water.
“[The JV] is disadvantageous to the government and consumers, tainted with corruption, [and does not follow the] applicable guidelines and laws and must be declared null and void,” Amlig Tubig said in a petition they filed before the court.
Despite this, Prime Water was still able to takeover BACIWA after the Regional Trial Court (RTC) Branch 45 dismissed the petition seeking to nullify the contract between the two parties.
As a result, Prime Water is now preparing to spend nearly P2 billion to develop the water supply system in Bacolod System over the next five years. The term of the JV is 25 years.