CAGAYAN DE ORO CITY – The contested debt of the Cagayan de Oro City Water District (COWD) remains unresolved despite a recent meeting that prevented disconnection of water supply from its bulk supplier.
THE Cagayan de Oro City Water District on Corrales Ave., Cagayan de Oro City. (Franck Dick Rosete)
Engr. Antonio Young, general manager of COWD, asserted that they still have no legal basis to pay the debt billed by their supplier, Cagayan de Oro Bulk Water Inc. (COBI), particularly from the accumulated price difference when COBI implemented a rate adjustment from P16.60 to P20.57 per cubic meter in 2021.
“The main issue here is the legal basis for paying,” Young said, reiterating that COWD, through its Board of Directors, did not acknowledge the rate adjustment implemented by their bulk supplier after they invoked force majeure due to the pandemic.
By not acknowledging it, the amount was not listed in COWD’s book of accounts as payables.
Mayor Rolando Uy here gathered top officials of the two parties on January 25 following a letter from COBI to COWD ordering it to settle its over P400-million debt as non-payment would result in the disconnection of its water supply.
READ: https://mb.com.ph/2024/1/17/p400-m-debt-threatens-cagayan-de-oro-city-water-supply
Aside from the price difference after COBI’s rate adjustment implementation, unpaid billings from previous months were also included in the over P400-million debt.
However, Young said the unpaid billing for four months in 2022 has been paid, and they only have the December payable as of January 2024.
Young couldn’t provide the exact figure, but after paying previous billings, he said the amount was reduced to more or less P350 million.
The city chief executive met the two parties as the halt in supply would definitely affect consumers. According to Young, the COBI assured during the meeting that there would be no disconnection from its supply.
The top COWD official emphasized the need to follow what was stated in their contract, which includes escalation to arbitration in order to determine if they really need to pay.
“How can I pay for something if it is not acknowledged as debt?" Young said. “Just in case the COA (Commission on Audit) disallows it, I’ll be liable,” he added.
Young said their rate adjustment was not illegal since they can adjust their tariff every three years based on the average consumer price index.
The COWD asserted that they can invoke force majeure based on the Bulk Water Supply Agreement considering the situation brought on by the pandemic.
In a press conference on January 16, Young cited a provision from the agreement where the dispute needs to be resolved within 20 business days, or else it shall be resolved by arbitration.
However, he confirmed that the dispute did not go to arbitration despite being beyond the time frame, as they were still negotiating at that time, until it was not further pursued for the reason of limited movement during the pandemic.
Young narrated that COBI will look for possible options prior to resorting to arbitration.