By Rjay Zuriaga Castor
Iloilo City Mayor Jerry Treñas described the contract agreement in Aboitiz InfraCapital Inc.’s Public-Private Partnership (PPP) proposal for the Iloilo Bulk Water Supply Project as “complicated.”
Treñas emphasized that the Build-Own-Operate (BOO) and Build-Lease (BL) contractual arrangements for the construction, operation, and maintenance of the bulk water supply are unfamiliar to his administration.
“The scheme of Aboitiz is to partner with both the province and the city. The city would be responsible for distributing or selling to a distributor, which seems complicated because we’re not used to that setup,” he said during a press conference on Monday, September 2.
The city government rejected Aboitiz’s unsolicited proposal on August 19, but Treñas noted that it is still under reconsideration.
The water supply project, valued at P8.45 billion, is expected to provide 80 million liters of potable treated water per day to Iloilo over a concession period of 33 years.
Under the BOO and BL scheme, Aboitiz would sell the treated bulk water to the implementing agencies — the city and provincial governments — which would then resell it to water distributors and third-party purchasers.
Treñas pointed out that the city government is only familiar with agreements where the bulk water supplier distributes directly to a distributor, as in the case of the Metro Iloilo Bulk Water Supply Corporation (MIB).
MIB is the bulk water supplier for the Metro Iloilo Water District, the utility that provides water for Iloilo City and the towns of Cabatuan, Leganes, Maasin, Oton, Pavia, San Miguel, and Santa Barbara in Iloilo province.
The mayor also mentioned that the proposal would pose a challenge for the city government, as it would require the creation of a new body to oversee the water sector.
He further emphasized that this scheme could lead to higher water rates for consumers due to the addition of two levels of charges—one from the city government and one from the distributor—being added to the price of water per cubic meter.
While Mayor Treñas remains open to the proposal, he remarked, “If the intention is good, I don’t think that we should be the ones selling; the direction should be straight to the distributor.”
He stressed that although the city needs more water supply, the city government would not make decisions “at the expense of our consumers.”
“I will wait for the PPP committee. If there is a proponent for the PPP, they will present it to the committee, and the committee will recommend it to me,” he added.
Aboitiz InfraCapital Inc. is the infrastructure arm of the Aboitiz Group, currently headed by President and CEO Cosette V. Canilao, an Ilongga who served as executive director of the PPP Center from 2010 to February 2016.
Among Aboitiz’s water projects is the P12 billion Davao City bulk water supply project, which boasts a capacity of 300 million liters per day.
