Make PrimeWater pay. That was the increasing consensus among San Pedrenses after the Sangguniang Panglungsod of San Pedro City, Laguna, passed a resolution urging the San Pedro Water District (SWPD) to terminate its joint venture agreement with PrimeWater Infrastructure Corp.
Make PrimeWater pay.
That was the increasing consensus among San Pedrenses after the news that the Sangguniang Panglungsod of San Pedro City, Laguna, has passed a resolution urging the San Pedro Water District (SWPD) to terminate its joint venture agreement (JVA) that it entered with PrimeWater Infrastructure Corp.
Given that no less than Mayor Art Mercado himself has pledged in successive State of the City Addresses (SOCA) to hold the water distribution company of the Villar Group accountable for its continued failure to provide adequate and potable water supply to San Pedrenses, concerned citizens have expressed their belief that the city government should do more than simply urge the SPWD to terminate its JVA.
SP Resolution
To recall, the Sangguniang Panglungsod finally passed a resolution last July 9 urging SPWD to start the process of terminating its 25-year JVA with PrimeWater that was entered with in 2015.
Councilor Vivi Villegas, chairperson of the SP’s Committee on Public Works and Infrastructure, noted three primary reasons for the resolution: the lack of adequate water supply provided by PrimeWater; the poor quality of distributed water; and the fact that PrimeWater’s consumers are still being charged despite the lack of water they receive from their taps.
The councilor also noted the fact that PrimeWater failed to provide the necessary documentation to prove that they have indeed resolved the issues of water supply and quality during the two en banc hearings conducted by the Committee on Public Works and Infrastructure on the issue of terminating the JVA.
So what’s the next step?
"The Sangguniang Panglungsod will communicate the resolution with the SPWD," Councilor Villegas informed OpinYon Laguna in a message.
She added that contrary to the false information being circulated on social media, neither the city government nor Mayor Mercado himself has the power or the authority to unilaterally terminate the JVA with PrimeWater.
According to Presidential Decree No. 198 (also known as the Provincial Water Utilities Act of 1973), local water utilities such as SPWD are under the jurisdiction not of the local government but of the Local Water Utilities Administration (LWUA).
What took it so long?
With the ball now on the SWPD to take the decisive action to terminate the JVA it entered with PrimeWater back in 2015, a political analyst who spoke on condition of anonymity to OpinYon Laguna questioned the apparent lack of initiative on the part of the water utility company to initiate its own steps to penalize PrimeWater without the prodding of the city government.
“Sa tingin ko, ang dapat nating busisiing maigi ay kung bakit tila hinayaan ng SPWD ang PrimeWater na paulit-ulit na lumabag sa napagkasunduan nila sa ilalim ng joint venture agreement,” the analyst explained.
It should be noted, that under the JVA (a copy which was obtained by OpinYon Laguna), SPWD has been given grounds to issue a notice of pre-termination for "event of default...within the period permitted" if PrimeWater commits a "material breach" of its obligation for a period of 30 days or extension thereof as maybe agreed by both parties.
Mercado’s letter to the SPWD dated May 6, 2024 also noted that more than 12 months have lapsed since the SPWD issued the 30-day ultimatum last December 12, 2022 – more than enough reason for SPWD to take that decisive step, the analyst pointed out.
“Bakit kailangan pang ang Sangguniang Panglungsod ang magtulak sa SPWD, na kung tutuusin ay hindi naman talaga hawak ng local government kundi ng LWUA, para i-terminate ang JVA?” the analyst opined.
Monetary penalties
More than simply terminating the JVA, moreover, the SPWD should look into imposing monetary penalties to PrimeWater for its repeated failures to follow through the JVA.
“Sa katunayan nga, may mga ilang local government unit na sa ibang bahagi ng Pilipinas na nagpapahayag na ipe-penalize nila ang PrimeWater dahil na rin sa kakulangan nito ng aksyon sa mga isyu tungkol sa water supply,” the analyst noted.
For instance, last April, Bacolod City Mayor Albie Benitez has asked the Board of Directors of the Bacolod City Water District (Baciwa), which also entered into a JVA with PrimeWater in 2020, to "impose penalties" against the water concessionaire for "allegedly violating the provision of their contract."
"After four years signing the agreement, there’s no concrete investment and they have no effort to deliver efficient supply or uninterrupted water supply to the consumers,” Benitez was quoted by media.
It should also be noted that, under Section 5.3 of the JVA, SPWD is entitled to "impose a penalty on PrimeWater for the latter's failure to perform any or all of its service obligation, which penalty shall be equivalent to twelve percent of the Performance Bond through the forfeiture of said amount from PrimeWater's Performance Bond."
“Sa tingin ko, hindi lamang PrimeWater ang dapat silipin dito sa naging pagkukulang nila sa kanilang mandato para sa mga San Pedrense,” the analyst said.
“Dapat ring masilip kung bakit tila naging kunsintidor ang SPWD at hinayaan na mag-deteriorate ang serbisyo ng PrimeWater to such an extent na kinaliangan pang ang mismong LGU na ang kumilos para tugunan ang hinaing ng mga San Pedrense.”
As of press time, PrimeWater and the SPWD have yet to make an official statement regarding the issue.
A Possible Ombudsman Case.
Even as the SPWD is taking its sweet time in executing the order to terminate the JV with Primewater from the city council, a consumers group is preparing a case build up against officials of SPWD and Primewater before the office of the Ombudsman.
The Institute for Consumer Research and Empowerment (I-Core) has closely monitored this alleged abuse by a service provider in possible connivance with the government regulator.
“There is every reason to believe that the people of San Pedro has been aggrieved in this JV, that allowed private parties to take advantage of consumers in the city,” I-Core said in a statement.
“Our group will push for officials who allowed this to happen to answer for their sins,” it said.
(With reports by Jai Duena and Michael San Juan)
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