Bad for business

If Cagayanons want to blame someone for their water problems, then they should blame their local water district.

The Cagayan de Oro Water District (COWD) has not paid and refuses to pay for the more than P400 million in accumulated unpaid water that it got from Cagayan de Oro Bulk Water Inc. (COBI), a unit of Metro Pacific Water.

The water, which COBI supplies to COWD and which accounts for about 40 percent of the water being provided by COWD, is treated and purchased from Rio Verde Water Consortium Inc. which used to be the bulk water supplier of COWD until their 2007 contract was declared void by the courts. To avert a potential water crisis in Cagayan de Oro, COWD entered into a contract with COBI for bulk water supply in 2017.

During the dispute between COWD and Rio Verde, COBI took a huge risk and invested P1.4 billion in Rio Verde in 2014 to ensure safe, reliable, and stable water supply for Cagayanons. This huge investment was made possible through the bulk water supply contract which was duly negotiated and approved by the COWD board.

COWD is saying that it did not agree with the increased water rates because of the pandemic’s impact on the local economy. But the 2017 contract between COWD and COBI allowed for an automatic adjustments. And COWD is refusing to pay for everything and not the contested portion of their debt representing the increase in water rates only.

Treating and supplying water requires massive investments. And just like any business, COBI invested a huge amount on the premise that its contractual partner which is COWD will honor its obligations under the contract.

COBI tried for years to amicably settle the dispute to no avail. Upon request from LWUA, the deadline was again moved to April 30. COBI was even willing to let COWD just pay the undisputed portion of their debt in installments while amicably discussing the disputed part. April 30 came and went and still nothing was heard from COWD.

Rio Verde advised COBI to cut off water supply to COWD since this was the only way for the water district to take the matter seriously. The two jointly decided to cut off water supply, but with the intention of restoring water supply as soon as COWD starts negotiating and shows seriousness in resolving the issue.

After the new deadline expired and as soon as COBI was going to disconnect, the city mayor declared a state of emergency to prevent COBI from cutting off water supply. The police have been deployed to make sure that the valves are untouched.

Shouldn’t Mayor Roland Uy instead be ordering COWD to start negotiations with COBI and honor its contractual obligation? If COWD continues to get water from COBI and Rio Verde in spite of the disconnection notice, isn’t that stealing?

This is actually a black eye on Cagayan de Oro’s image and prospect as a viable investment hub. If the local government and its businessmen can renege on a contract just like that, who would ever want to do business with them?

Energy insecurity remains

More than two decades after the Electric Power Industry Reform Act (EPIRA) was enacted into law, the power outlook in the country remains bleak.

A paper prepared by the Congressional Policy and Budget Research department of the House of Representatives noted that the vision of an affordable, competitively priced, and secure electricity supply has remained elusive and that energy insecurity remains a major impediment to sustainable economic growth and competitiveness.

However, the paper seems to have missed out the fact that while EPIRA entrusted the job of power generation planning to the Department of Energy, the latter has failed miserably in doing so.

Industry observers say that whatever semblance of energy planning at the DOE is nothing more than a mere tally of supply and demand, ignoring all other factors considered by energy planners around the world.

The DOE and Energy Regulatory Commission (ERC) have failed to act on their respective mandates to formulate a stable and realistic power development strategy, leaving industry experts wondering why the government continues to ignore what is obviously the solution. Our country needs more power, with the right balance of technology and fuel, in the right locations.

To avoid scrutiny, the DOE has conveniently shifted the blame and burden to the National Grid Corporation of the Philippines (NGCP) to remedy the power problem.

The recent Panay power outage serves as a stark reminder of the consequences of this negligence. While DOE and ERC were quick to point an accusing finger at NGCP’s delayed Cebu-Negros-Panay Stage 3 230kV (CNP3) interconnection project, they conveniently turned a blind eye to the fundamental issue: the absence of enough generation in the island of Panay, and the entire country as a whole.

Last month’s inauguration of the Visayas-Mindanao power link marked a historic moment for the country’s unified grid. But instead of giving credit where credit is due, the DOE chose to take potshots by underlining NGCP’s shortcomings, while sweeping its own failures under the rug.

Observers further noted that the incompetence and shallow outlook of the DOE and ERC is further underscored by their biased decisions, resulting in a skewed generation mix that is heavily reliant on variable renewable energy sources, which unfortunately are known for their inherent intermittence and unreliability.

The DOE and ERC must rise above their incompetence, discard biases, and work toward a comprehensive generation development plan that embraces a diverse and sustainable mix. Only then can the nation truly embark on a path toward energy security and economic prosperity.

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