City Council wants to end PWRI deal

CEBU, Philippines — The Cebu City Council has authorized Mayor Nestor D. Archival to take legal and administrative steps toward the possible termination of the city’s Joint Venture Agreement (JVA) with Pilipinas Water Resources Inc. (PWRI), citing years of audit findings, inspection reports and complaints from affected communities.

Councilor Sisinio M. Andales, who sponsored the measure, cited a long record of alleged violations and deficiencies in the company’s operations, including questioned remittances and environmental compliance issues.

“March in 2010 we entered into this JVA. We are now in 2026, so 16 years had passed. Based on audit reports, Audit Observation Memorandum from COA dated April 1, 2016, COA found irregularities and deficiencies in the remittance of the amount to the City of Cebu,” Andales said.

The Commission on Audit (COA) had flagged deficiencies amounting to ?22.7 million in remittances due to the city.

Complaints from affected families and other stakeholders also raised concerns over the handling of desalination operations, including alleged saline water intrusion in areas intended to receive potable water.

A technical review conducted on December 4, 2024, reportedly found that the company’s operations posed environmental risks, including worsening saltwater intrusion and threats to biodiversity.

Andales said the alleged operational failures raised concerns about public health and safety.

“On the report and complaint from the affected families and stakeholders, PWRI mishandled the operation and maintenance of the desalinated water treatment. The review revealed that it violates environmental reach, which directly translates to risks for the community’s safety and well-being. The failure to provide safe and properly treated water adversely affects public welfare,” he said.

Inspections by the Cebu City Environment and Natural Resources Office (CCENRO) also found that PWRI facilities had operated without Environmental Compliance Certificates (ECCs), allegedly violating Presidential Decree No. 1586.

“The inspection dated April 30, 2026 revealed that the company operated without any Environmental Compliance Certificate in 2024, violating Presidential Decree 1586 and related environmental laws. That is why the mayor, based on the joint venture agreement, has the right to terminate the said joint venture agreement because clearly this is a violation of our environmental compliance,” Andales added.

Section 14 of the JVA provides grounds for termination if either party defaults on its obligations or breaches its representations and warranties.

Andales also cited Section 9, which sets the joint venture’s term at 30 years, but said the city could still terminate the agreement if violations continued to disadvantage its constituents.

“Here in the joint venture agreement, under Section 9, the term of joint development shall continue to be valid and effective for 30 years. But the city has the right also to terminate. If you continue this violation, then simply because this is a disadvantage to the constituency of the City of Cebu.”

Under the approved resolution, Archival is authorized to sign and issue the necessary notices and documents to pursue termination, subject to legal review confirming sufficient grounds. Copies will be furnished to the City Treasurer, COA and other concerned offices for appropriate action.

The move seeks to hold PWRI accountable for the reported deficiencies and address concerns over environmental compliance and the safety of the city’s water supply — (FREEMAN)