LETTER: No to onerous loans, no to water privatization!

The loan is supposedly intended to fund the Comprehensive Mainline Replacement Program (CMRP) but is adamantly opposed by labor unions, farmers' groups, consumer organizations, youth groups, faith-based organizations, environmentalists, and community-based organizations because they view the loan as leverage towards the total sell-out of freshwater resources and delivery system to profit-thirsty multinational and local corporations. 

I fully agree with Consumer Alert that the fears of consumers of Davao City on the threats of privatization and commodification of water are not without basis. I also agree that the campaign against the proposed loan is not just an internal conflict between DCWD management and the local union Nagkahiusang Mamumuo sa Davao City Water District (NAMADACWAD) but basically a contradiction between corporate control of water resources to extract mega-profits and people's control of water resources to actualize water as a basic human right.

Recently, some members of the Sangguniang Panlungsod expressed their disappointment to DCWD officials for their arrogant absence in the second hearing of the proposed loan. Instead, DCWD officials are calling for a joint executive-legislative forum on the matter within the first and second weeks of November which provoked further consumers' protests.

What are DCWD officials hiding (from) the public? I fully agree with City Councilor Jose Villafuerte, chair of committee on government enterprises and privatization which is leading the probe on the controversial loan, that the explaining must be to the people more than to the members of the executive and legislative branches of the city government. 

The following baseline data and information that the DCWD Board and Management do not want us to know are:

  1. There is now a growing consensus among civil society groups that the loan for CMRP is part of the grand plan to prepare the way for a greater private sector participation in water resource development (spelled: privatization) by funding surface or bulk water from the Tamugan-Panigan Rivers to provide additional water supply to DCWD. The water firm is planning to tap more surface water subscribing to the recommendation of the Japan International Cooperation Agency (JICA)-commissioned 1998 Master Plan Study on Water which claims that all metropolitan areas like Davao City will experience water problems due to depleted groundwater resources by 2025. Water democracy advocates view the said study as justification for water commodification and privatization knowing the track record of JICA which is using official development assistance (ODA) to push for onerous and unfair conditionalities like privatization of vital government owned and controlled corporations.
  2. Bulk water supply scheme has been already implemented in Cagayan de Oro Water District (COWD) wherein a private consortium Rio Verde Development Corporation (RVDC), a firm partially owned by American investors, was given the authority to supply water on a number of COWD's concession areas. In this connection, LWUA has approved a PhP 391.1 million loan to finance COWD's bulk water supply project in partnership with RVDC. Like the controversial NBN-ZTE contract, the project is now under public criticism because it did not undergo transparent processes and public consultation.   
  3. Citizens' group are now wondering what local and international corporate elites will be given the "right" to supply bulk water to DCWD.  I would like to give a clue that it is a public knowledge that corporations who are investing in energy and mining are also expanding their investments in water.
  4. Under the policy and terms of LWUA prior to the approval of loans, a guarantee of payment is needed through water rate increases. This is very true in our experiences of series of water rate hikes. Further, COWD has been implementing a five step annual increases in water rates to allow it to maintain its "financial viability" after it availed of a PhP 520-million loan from LWUA in 2001 to finance its Phase III improvement program which is part of the preparatory infrastructures for the bulk water supply project and is very similar to the CMRP scheme of DCWD.
  5. Surface water from Tamugan-Panigan Rivers is unsafe for drinking and peoples' utilization because its water quality is being degraded by toxic chemicals coming from mono-crop plantations. It needs huge investment, most likely through loans, to treat unsafe water wherein the citizens of Davao will carry the burden of paying onerous loans through water rate hikes. This will lead to deprivation of the poor and marginalized sectors' access to water. The people might not enjoy the ecological benefits of nature. Why not protect and conserve our important re-charge zones and aquifers by instituting a genuine land-use plan for Davao City , stop the expansions of mono-crop plantations in watershed areas and mobilize the people for rainforestation?
  6. Surface or bulk water supply project is not mainly designed to cater the right of the people to access water but to cater the increasing water demand of expanding mono-crop plantations and large-scale mining in the Davao Region. In effect, this will now become a lucrative source of mega-profits of transnational and local corporate elites at the expense of people's right to water and integrity of freshwater ecosystems.
  7. Further, the Arroyo government through its Medium Term Development Plan for Water Resources is actively promoting greater private sector participation in water resource development which is exactly tantamount to privatization and commodification of freshwater resources.

As a response to the situation, civil society groups have formed a coalition called Consumer Alert to campaign against water privatization and for upholding public/people's control of water resources and utilities. The coalition is asserting that water is a basic need for all life forms or biodiversity and is seeking to ensure sustainability of water resources and natural ecosystems, to protect water quality, to promote environmental justice, democratic water governance, and to prevent domination and monopolization of water resources by transnational corporations and other powerful private interests.

It is a commendable move that Consumer Alert is now engaging with the members of the Sangguniang Panlungsod in investigating the proposed loan of DCWD and to verify its merits. It is now actualizing what democratic governance in water resources, supply management and services should be – transparent, accountable and strengthening people's participation and empowerment in decision-making

Juland R. Suazo*

(*Juland R. Suazo is the former Secretary General of Bagong Alyansang Makabayan (BAYAN) Southern Mindanao Region. He is now working as project officer in a local donor agency working for biodiversity conservation and sustainable development)


  1. LWUA website: www.lwua.gov.ph
  2. IBON Databank website: www.ibon.org
  3. Consumer Alert primer on water privatization 2007