BCWD Privatization: Creating Equity to Butuanons Access to Cheaper Water Rates, Better Service

The struggle over water is certainly not a new phenomenon. A series of discussions, meetings, SP Committee hearings have been conducted by different agencies in the government including NGO’s in an effort to resolve the Taguibo Watershed Issue that allegedly affects the quality of water supplied by Butuan City Water District (BCWD.

However, in the morning of August 15, a press conference was held by People’s Movement for Socio Economic Development (PMSed) with Head Convenor Roberto Rosales who presented a whole new idea that will accordingly reduce payments of water bills benefiting BCWD consumers and could result to better management of the utility.

In a letter dated July 3, 2009 to Local Water Utilities Administration (LWUA) Chairman of the Board, Prospero Pichay Jr. the movement proposed for BCWD’s privatization allowing consumers to become stakeholders.

Under the PMSed proposed privatization plan, it was being offered to pay off the existing 1 billion peso loan obligations of BCWD to LWUA.

By allowing consumers to be stakeholders, it was also being proposed to convert their deposits into equity contribution and be accorded 35-45% of the total equity contribution giving the people of Butuan a chance to be members of the board, while the 55% will be offered to interested local businessmen.

With the contention that BCWD is to go up against privatization, instead of proposing a total overhaul of the top management level, PMSed Head Convenor Roberto Rosales said, “there will be an option of retaining them from their position as they are more knowledgeable of the operation.”

The Taguibo Watershed controversy have always posed a major challenge to the people of Butuan, but with the privatization plan it is now the local media industry that was being challenged by Mr. Rosales for the realization of said proposal.

The media, as catalyst for change will lead Butuanons in convincing the majority to support and lobby for BCWD’s conversion into a public corporation.

Rosales revealed, PMSed’s letter to LWUA Board Chairman Prospero Pichay seeking his support for the privatization proposal has something to do with BCWD’s 1 billion total loan to LWUA.

During the said press conference, part also of the revelation is LWUA’s alleged disclosure of more than 140 million loans for BCWD’s mechanical filtration plant which includes the installation of 7 micro filter projects contrary to what has been divulged to the public which is only 83 million.

Said micro filter supposed to be BCWD’s solution of providing continuous water supply despite turbidity in its water source in Taguibo River.
Another revelation according to Mr. Rosales is the fact that BCWD is not in the position to get hold of a new loan outside LWUA.

“Acquiring another multi-million loan to purchase from Israel the 7 micro filters now installed by BCWD according to LWUA Board Chairman Prospero Pichay can put them in jail,” said Mr. Rosales.

As the technical advisory service and financial provider of water districts n the Philippines, LWUA’s policy states that a waiver has to be executed first to grant authority to water districts to obtain loans from other lending institutions if the funding requirement is not available from LWUA or the project being endorsed for funding was not approved.

In BCWD’s case, it needs such waiver after LWUA disapproved the granting of additional funding requirement of the micro filter project in which it did not obtain.

The challenge of PMSed to the local media to build an alliance in an effort to get the public’s support to convince LWUA Board Chairman Pichay to let water consumers become part owners of BCWD and in the hope to be replicated in other areas in the country gained favourable response.