LGUs can keep water districts away from LWUA loans ? official

Partnerships with the local government units in their areas can help water districts around Mindanao do away with loans from the Local Water Utilities Administration (LWUA), Juanito Aroa, also general manager of the Malaybalay City Water District said.

He said one way to cut water rate hikes is to coordinate with the local government unit, which he said should have the same mandate as the water district to provide public utilities.

He said water districts could use the scheme to augment capacity to serve more concessionaires or repair old pipelines.

Aroa said despite the available sources of potable water in most localities, water rates will be expected to increase because of the cost to improve sourcing and distributing the water to an increasing number of concessionaires and serving new areas where people used to get water from deep wells.

"Before, we can't expand unless we get loans," Aroa said.

Aroa stressed the improvement of a locality's water supply could also mean improvement of its economy.

But water districts were hindered from expanding due to lack of capacity, he said. That is why, he added, many resort to acquiring loans that oftentimes mean higher water rates.

Aroa said, however, that if water districts work with the local government, water districts need not borrow.

He said the water district can lobby with the local government to fund components of an expansion program.

He cited the case of Malaybalay City where he said a water project has been identified by leaders of LWUA as "a model case".

Malaybalay City Mayor Florencio Flores Jr. said for four years since 2002, the city government allocated P30 million each year to raise funds for the city's P131 million surface water resource.

He told MindaNews Monday the city government has engaged in a special economic enterprise, earning for local coffers a net income of at least P220,000 a month by selling water it sourced — to MCWD.

The city government sources water from Kibalabag area, a remote barangay in the city's northeastern part by piping and processing it ready for the water district's distribution.

Aroa said the effort has been done with technical support from LWUA, making the project an effort of the three entities.

He said the original proposal was to loan at least P390 million from LWUA. But the plan was blocked by water concessionaires in 2003 because it was projected to increase water rates by at least triple.

At that time, Malaybalay City was looking for more water sources to augment its capacity sourced from Sawaga River as part of its effort to extend services to new lines in a number of suburban barangays.

Initially, a rift ensued between the city government and the water district until the present scheme was revised, wherein the water district is buying water sourced by the city government using the latter's own infrastructure.

In the scheme, the city government earns and the water district does not pay interest for any loan.

Aroa said up to now the water district has outstanding loans with LWUA since it started acquiring debts in the 1980s.

The water district pays as much as P230,000 a month for a total outstanding loan of P12 million that could extend up to 2020.

Aroa cited a Department of Interior and Local Government memorandum circular advising LGUs to closely coordinate with water districts as one push for joint local arrangements on water projects.