The
provincial and city governments will separately petition for the issuance of a
temporary restraining order at the Regional Trial Court (RTC) on the imposition
of a 40.79% water rate increase of Bohol Water Utilities Inc. (BWUI).
Capitol
and City Hall officials will take the legal remedies against the increase of water
rates, which was approved by the National Water Resource Board (NWRB).
The
increase will be implemented on December 5.
This
water rate hike will affect the entire city and some parts of Baclayon town that
are being served by BWUI.
It
may be recalled that the NWRB dismissed the opposition to the water rate increase
filed by the provincial and city governments, for lack of merit, in a decision
last September 20.
The
provincial government considers filing an intra-corporate complaint against BWUI
before the RTC questioning Bohol Water's board resolution to petition for rates
increase with the NWRB on the ground of fraud.
The
said board resolution was allegedly done without the participation of the provincial
government's directors-representatives, particularly Engr. Francisco Ceniza, despite
an agreement by the water utility company's directors that there should be unanimity
on the rates increase before the petition will be filed. | | | In
a memorandum submitted to Gov. Erico Aumentado last Friday, Provincial legal officer
Atty. Handel Lagunay, theorized that "in the absence of a valid board resolution,
the petition for rates increase was unauthorized and, therefore, there could have
been no valid petition to speak of in the first place."
Hence,
Bohol Water have "no valid rates increase to be imposed and collected,"
Lagunay stated
further.
On
the other hand, the city government will petition for the issuance of a TRO on
the basis that the NWRB granted BWUI's petition for rates increase even as its
legal counsel, then city councilor Nerio Zamora, was not able to cross-examine
BWUI's witnesses due to his deteriorating health and eventually his demise at
the time evidences and witnesses where presented at the NWRB. |
Only
the provincial government, through counsel Lagunay, was able to cross-examine
their witnesses.
With
the death of Zamora, city councilor Danilo Bantugan took over as the city's counsel.
He
filed a motion for reconsideration in order that the city government could cross-examine
the witnesses presented by BWUI with the basis of death of city's counsel Zamora.
However, the NWRB denied the motion and proceeded to promulgate a decision granting
rate increase to Bohol Water.
Lagunay's
memorandum to the governor also recommended that any interested parties, such
as the city government, can file a petition for the annulment of the NWRB decision.
Under
the Rules and Pleadings, Practice and Procedure before the NWRB, the decision
of the board should be appealed at the RTC of the province where the subject matter
of the controversy is situated.
Meanwhile,
City Hall is planning to charge Bohol Water with city waterworks' facilities and
installations that are being used by the utility company pursuant to their memorandum
of agreement.
PROV'L
SP'S STAND
A
tug-of-war between the provincial government as part-owner of the Bohol Water
Utilities Incorporated (BWUI) and Salcon Group of companies appears to be raging
because of the latter's plan to effect water rates increase imposed upon Tagbilaran
consumers.
Provincial
Board Member Felix Uy, chair of the utilities committee if the Sangguniang Pasnlalawigan
of Bohol has proposed for twin Resolutions interposing objection to the plan of
BWUI to increase water rates and authorizing the provincial governor to file a
suit against the company.
But
before the SP approved Uy's proposal presented during the regular session last
Friday, BM Godofreda Tirol objected for reason of propriety because the provincial
government have a 30% share in both BWUI and Bohol Light Company Incorporated
(BLCI).
Salcon
group of companies that created the twin utility companies got the lion's share
of 70% after the provincial government joined forces with it through a joint venture
agreement that eventually phased out the former Provincial Public Utilities department
(PPUD) during then Gov. Rene Relampagos' administration.
Until
now, it is unclear whether the provincial government had already received its
share after five years of operations of both utilities.
Vice-Gov.
Julius Caesar Herrera, who presided over the session suggested to defer Uy's proposal
and tackled it at the committee level.
Herrera
banged the gavel for the deferment after Uy agreed and referred to his committee.
BACKGROUND
The
water rate hike will translate to an additional P8.12 for a minimum consumption
not exceeding 10 cu.m., P2.15 for 11-20 cu.m., P6.15 additional for 21-30 cu.m.
and an increase of P12.63 for 31 cu.m. up for consumers' monthly water billings.
The
NWRB set the approved rates at P80 for a consumption block of 0-10 cubic meters
(minimum), P10.75 per cu.m. for a consumption of 11-20 cu.m., P13.75 per cu.m.
for a 21-30 cu.m. consumption and P30.50 for 31 cu.m. and above consumption.
Based
on the results of ocular inspection and evaluation of the books of accounts of
BWUI, the NWRB found that the present water rates were way below the 12% maximum
profitability or Return of Investment (ROI) which is allowed to public utility
companies in order to gain from its costs of operations.
Financial
statements submitted by BWUI showed net losses of P5,605,198.00 and P7,145,144.00
for the fiscal years 2004 and 2005, respectively, that resulted in an average
negative ROI of 4.24%.
Figures
further showed that the company has been subsidizing these losses because of increasing
costs of operations and maintenance.
Testifying
during the NWRB hearing on September 16, 2005, BWUI vice president Hamelito Quikoles
said that the present rates enjoyed by water consumers is thirty centavos (P0.30)
lower than what was approved in the Joint Venture Agreement (JVA) on August 28,
2000.
Although
the utility company was allowed to apply for a new set of water rates increase
on December 28, 2002, BWUI instead opted to concentrate on improving the water
system, in additional capital outlays, to ensure a 24-hour supply and reduce losses
from non-revenue water.
This
is the first rate increase of BWUI since its takeover of the Provincial Public
Utilities Department (PPUD) on December 2000.
The
NWRB also noted that power costs accounted for 35% of production which covered
a significant portion of the water utility's operating expenses. Average cost
of water produced amounted to P10.84 per cubic meter.
However,
the NWRB modified the original proposed water rate increase filed by BWUI that
averaged 43.40% to an average percentage increase of 40.79%, the approved adjustment.
(With reports from Ric Obedencio) | 
