By: Modesto P. Sa-onoy
Before we proceed, the information used in this series was sent to me by the “opposition” within the water district. Similar documents were sent by two others, but they preferred to keep their identities confidential, which is understandable. If there is anybody, particularly the board members or Prime Water or the members of the Selection Committee, who wish to refute or present contradicting information, they are welcome to do so.
Last week we cited the written opposition to the Joint Venture between the Bacolod City Water District and Prime Water Infrastructure for the latter to practically “take over” the district. The existing Baciwa will only be a shell of a company but retaining the façade of a government corporation. There is some complication in this situation, but we will deal with that latter when the two finally formalize their agreement. The reason is that changes can come along the way because the government is now looking at the Public-Private Partnership Agreement that may torpedo the Baciwa-Prime Water deal.
Last week we said that retirees who will accept the deal will receive a 400% increment in their benefit that will be given by Baciwa and Prime Water. While this will make instant millionaires of these retirees, the consumers will actually “reimburse” Prime Water, according to the opposition. If that is so, Prime Water will not lose anything but will benefit from the quicker acceptance by the Baciwa employees. Now we know who will get skewered.
The problem is that Baciwa does not have the financial capacity to pay for the 150% increment which must be paid “upon signing the JVA.” This is ironic because one reason of Baciwa for entering into a joint venture is its inability to pay the retirement benefits of the employees. If this is so, the opposition asks: how will Baciwa cover its part of the bargain? Will increasing water rates not do it?
Here’s a legal issue about this joint venture that Baciwa has kept secret. According to the opposition, “the proposed JVA between Baciwa and Prime Water will be a circumvention of the 2013 NEDA (National Economic Development Authority) Joint Venture Guidelines. Nowhere can you find in the guidelines that the employees of the government will be absorbed by the private partner and will become its employees. The Prime Water allegedly found (out) some loopholes in the guidelines and capitalized on these loopholes. The PPP does not intend to compromise the security of tenure of the employees.”
Surely, Prime Water has a stable of legal luminaries on its payroll and was able to find the “loopholes”. Indeed, there are schemes that will enable Prime Water “not to absorb” the employees. It is a matter of these employees retiring early and being rehired. Baciwa will also remain, so it is a matter of its employees “coordinating” their work with Prime Water for additional allowances. That will make everybody happy except the consumers who will have to carry the additional burden of higher water rates.
On the other hand, if Baciwa and Prime Water were able to deliver water 24/7 who’s going to complain? As I wrote early, consumers are more concerned about the availability of water at a reasonable cost rather than who delivers it. That is the bottom line.
There is speculation that Baciwa entered into this venture due to political influence and the question of “the main motivator”. Well, everybody has a motive and businessmen have mostly financial motivation and so are the others who see personal benefits in the deal. On the other side, what motivates the opposition? That is a matter of every person’s concern provided that in the process the common good is not sacrificed on the altar of greed.
The argument is anchored on the common welfare – there is really no need for Baciwa to enter into this venture; it needs only to improve because it has 46 years of experience, that cannot be “relinquished to a private entity” as this will constitute “an abandonment of its purpose and mission.” Moreover, I was personally informed last Friday, Baciwa has in truth enough money. It is financially healthy, pays its debt and can afford to expand. He illustrated this and emphasized that Prime Water has not revealed how much it will commit.
Let’s continue tomorrow with the “deficiencies and disadvantages of the JVA contract”.