Manila Water Co. Inc. said on Monday that its subsidiary, Cebu Manila Water Development Inc. (CMWD), has terminated its bulk water supply contract with Metro Cebu Water District (MCWD) beginning 1 December this year.
The business told the Philippine Stock Exchange that its water supply contract with MWCD was first signed and sealed 10 years earlier.
The CMWD is a joint investment of the Manila Water Consortium Inc. and the provincial government of Cebu. Manila Water Consortium Inc. is a subsidiary of Manila Water Philippine Ventures Inc. which is a wholly-owned subsidiary of Manila Water.
Local reports quote Cebu governor Gwendolyn Garcia as saying CMWD operating at a loss on the basis of a contract where it is paid only P24.59 per cubic meter for 20 years or until 2034 without escalation or increase.
Garcia said the tariff rate is insufficient to sustain the CMWD’s continued operations.
With the contract terminated, Garcia said the provincial government entered into a separate agreement with the CMWD and the MCWD under which the local government will buy bulk water from CMWD and sell the water to MCWD at the same tariff rate of P24.59 per cubic meter.
The arrangement will last only until MCWD finds a new supplier following a thorough bidding process or a new contract with CMWD.
Manila Water has also temporarily suspended excavation activities in major thoroughfares within the East Zone of Metro Manila following a government resolution acknowledging metro-wide preparations for the coming holidays.
