CAGAYAN DE ORO CITY — When President Bongbong Marcos said he was asking the Local Water Utilities Administration (LWUA) to study the possible management of the Cagayan de Oro Water District (COWD), parties favoring the bulkwater supplier were happy.

We understand why or as we say in tambay speak: Alams na!

In the days before the Cagayan de Oro Bulkwater Inc. (COBI) ordered its bulkwater supplier Rio Verde Water Consortium Inc. (RVWCI) to cut off water supply to the COWD, the LWUA intervened in the negotiations between the water district and COBI.

LWUA was outspoken against the supposed lack of urgency by the COWD in addressing the P479 million levy by COBI for the water rate increases in 2021 and January 2024. LWUA wanted the COWD board to convene and decide on paying COBI.

Does LWUA have the power to order the board of directors of a water district to convene?

Granting it has the power to do so, did it also order COBI to convene its board to decide on the force majeure claim of the COWD?

From public records disclosed, there is no showing LWUA asked the COBI to that effect.

This makes valid the assertion of the members of the COWD negotiating team that LWUA did not mediate but imposed on COWD.

Question:

Did the president order LWUA to take over the COWD?

NO.

This is what the president said during his visit to Cagayan de Oro last May 16, 2024:

(excerpts of PBBM’s speech, May 16, 2024, Cagayan de Oro City)

“Akin ding inatasan ang LWUA na pag-aralan ang posibleng pamamahala (emphasis supplied) nito sa COWD upang sa lalong madaling panahon mapag-aralan ang solusyon sa situation sa supply ng tubig sa inyong lugar. Hindi lang sa supply nga tubig pati na ang pagtukoy ng angkop na water rate at pagtupad sa mga obligasyon nito sa mga consumer at mga supplier. Hindi natin hahayaan na mapagkaitan ang mga taga Cagayan de Oro ng kanilang karapatan na magkaruon ng sapat, malinis,  ligtas na supply ng tubig.”

When LWUA asked the opinion of the Dept. of Justice (DOJ), it did the right thing. The Justice Department is the expert on law in the President’s official family; 2) It can be surmised that in their study, as directed by PBBM, they consulted the DOJ.

The legal inquiry by LWUA has two parts: 1) Whether LWUA can legitimately take over the COWD; and 2) Whether LWUA can ascertain the proper water rate for the COWD to ensure it will be able to fulfill its obligations to its consumers and its water supplier.

The framing of the second question gives away the position of LWUA that COWD should pay the P479M levy of COBI, despite the water district’s valid objections, like force majeure (COVID-19 pandemic).

The questions are interrelated. It has to be established if the COWD has defaulted on its financial obligations to the LWUA. Records show it is not. And if it is not in financial default, why would there be a need for LWUA to ascertain proper water rates so the COWD can fulfill their obligations to consumers and ‘supplier’? (Note that COWD has many suppliers, using the singular form speaks clearly — it is pointed to the ‘supplier’ making a collection.)

In the seven-page DOJ opinion signed by Usec. Raul T. Vasquez dated June 18, 2024, is clear LWUA can only take over a water district if there is financial default. On whether LWUA can ascertain water rates, the DOJ said, NO, LWUA can only review and revise.

Page 4, par 1 of the DOJ opinion:

“Under both provisions, it is clear that LWUA may only take over and operate the entire facilities, systems, or properties of the district when the following elements are present: (a) the local water district is in default; (b) the default is in the payment of principal or interest on its outstanding bonds or other obligations, and (c) the outstanding bonds or other obligations of the local water district are incurred to LWUA. For grounds other than that pertaining to default in the payment of a loan, LWUA may not “intervene” in the affairs of the concerned water district.”

In the preceding page, the DOJ opinion cited Presidential Decree 198 sections 31 – on default and sections 61 on loans.

On whether the LWUA can ascertain water rates for water districts, paragraphs 3 and 4 of page 6 of the DOJ opinion states:

“Jurisprudence explained that this revisory power of LWUA is quasi-judicial in nature:

“The LWUA has quasi-judicial power only as regards rates of charges fixed by water districts, which it may review to establish compliance with the provisions of PD 198.

“Hence on the query of whether LWUA has authority to determine and fix fair and reasonable rates, charges, tariffs, and other special rates, and schedules, and approve rates provisionally, LWUA can merely review the same.”

While it is established that DOJ opinion cannot be executed and is advisory, it has strong persuasive powers on agencies under the executive branch. Disagreeing or disobeying such an opinion is akin to disobeying the President.

If LWUA respects the President it should have focused on addressing the issue of whether the levy of COBI to COWD is valid. Whether the 2017 contract is onerous or not.

What is observed in the intervention was a witch-hunting and dribbling of the contractual issues by the interim management.

While I agree the COWD is not pristine, and there is substantial reason to believe there are irregularities in the management, witch-hunting does not help. It could have been enough to set aside, for the moment, mismanagement issues and the like, and proceed with the tasks at hand. The DOJ opinion, is in fact, instructive as to the meets and bounds of LWUA’s intervention as provided by PD 198.

Compounding the LWUA’s problem is, that while they clothed the takeover with the term full intervention, the position of the Commission on Audit (COA) as manifested in the letter of the Supervising Auditor and Concurrent Audit Team Leader for COWD Florita K. Kionesala dated July 4, 2024, that “only permanently appointed officials shall be designated as disbursing officers, among other guidelines related to cash advances,” citing COA Circular No. 97-002.

Isn’t it proper then for LWUA to rethink its “full takeover” strategy because its designated interim general manager cannot even sign disbursement vouchers and checks?

While it did ask the DOJ for legal advice to fulfill the president’s order to study the possible management (pag-aralan ang posibleng pamamahala), when the DOJ comes with advice, they set aside the legal advice.

The biggest question now is for whom does the LWUA answer? Sino ang boss ng LWUA?

PS

Is it true that a government official flew in and flew out of CDO one Saturday to relay the invitation of MVP to Mayor Klarex Uy for a meeting in Manila?  (Ref: https://filobserver.wpcomstaging.com/2024/07/25/oro-mayor-tells-lwua-mvp-rescind-2017-contract/)

Honorable Executive Secretary Lucas Bersamin, Mahal na Pangulong BBM, pwedi ba ito?