People's Domain

[Opinion] The re-privatization of water

Expressing concern on the dwindling supply of water and the deteriorating water services by the Metro Iloilo Water District, Iloilo City’s chief executive Jerry Treñas suggested it would be best to turn over the operations of the water utility to a private entity.

According to Treñas, the privatization of the water utility has been on top of his agenda. Through privatization, MIWD’s services “will improve in all its service areas”, he added.

On the other hand, presidential assistant on water concerns Larry Jamora have expressed a similar concern regarding MIWD’s inability to provide the quality of service it is mandated to do. He likewise endorsed the idea of privatizing the water utility.

Just very recently, Iloilo City Councilor Julienne “Jam-Jam” Baronda delivered a privilege speech in a regular session of the City Council criticizing MIWD’s management of its inadequacy to provide water to all end-users in its franchise area. Councilor Baronda’s “verbalization” was viewed by many as merely politicking for it lacks concrete recommendations on how the problem would be resolved.

Considered as one of the oldest water works system in the country, the water district was formalized in 1926 through Commonwealth Act No. 3222 which “authorized the Provincial Government of Iloilo and selected municipalities to be covered by the proposed service area of a waterworks system and to provide funds through the issuance of bonds of the Insular Government.” The bonds is to be guaranteed by the province and municipalities covered by its services.

On top of Iloilo City, the municipalities of Pavia, Leganes, Sta. Barbara, Maasin, Cabatuan, San Miguel, and Oton are sourcing its water supply from MIWD. In terms of providing essential services, MIWD has broader and wider service coverage if compared to Panay Electric Company – the city’s sole electricity service provider. Yet estimates have revealed that out of 100 percent, only roughly 30 percent has access to MIWD services. This simple statistics would indicate that since its inception, MIWD has denied people access to water services and it has failed to gradually improve its facilities for the efficient delivery of its services.

This is mind-boggling because a closer scrutiny on the finances of MIWD would show two things: One, literally billions of pesos has been registered in its coffers for the purpose of improving its facilities and services. Two, its coffers have been squeezed dry by people responsible of its management and operations.

For instance, the Asian Development Bank has facilitated loan grants and finance assistance to MIWD. Although a foreign assistance by nature, the loan grant is a debt creating support which will be paid using people’s money, including the interest payment. It is only logical to say that such funds must be utilized properly and it must result to a better quality of service.

Yet these financial grants are suspected to be misused because MIWD has also a pattern of corruption. Reports released by the Commission on Audit disclosed that MIWD have been suffering from serious financial mismanagement. The COA report reveals that MIWD’s “Loan Account per books does not tally with its Loan Amortization schedule”. The difference amounts to millions of pesos – a figure which could not be properly explained where it was allocated or how it was spent.

It is also uncovered in the same report that MIWD management has been issuing “excessive allowances” to its general manager and board members, particularly in attending conventions and conferences. These excessive allowances were noticed by COA for it violates the guidelines set by national budget circulars governing travel and accommodations during conferences.  The same was observed on the performance bonuses and grocery allowances issued by the management.

These issues require serious investigation by the chief executive and by the person tasked to supervise water related concerns. Yet correcting these documented irregularities is at the least of the concerns of both Treñas and Jamora in spite of the fact that both of them have direct hand in addressing the problems besetting the water utility. These issues could somehow clarify why the water utility have stagnated all these years.

Pushing for its privatization without first holding the people responsible and accountable for its misdeed which eventually resulted in the failure of the water utility to deliver water to its customers is tantamount to cover up.

I believe that privatizing MIWD is not the answer to the problem. Both structural and institutional reforms is the least expected in a privatized set up. It has been how MIWD was operated all these years. It is the private sector through its representatives, which has reigned over its policy making body.

A simple look on the composition of its board of directors provides a concrete illustration on how MIWD is operated – it is a public utility operated by private people. Why then the need to privatize when in fact it is private sector who shaped its policies?

Mayor Jerry Treñas and Undersecretary Larry Jamora are the faces of the private sector in the government – they are business people first and foremost before being “public servants”. Being the chief executive and presidential assistant on water concerns, both of them are key personalities in the management of Iloilo City’s water utility. Now, who is mismanaging MIWD? This is a case of re-privatization of what is essentially a privately-operated public utility. (Sun.Star Iloilo Online, 8 October 2009)

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