The interim Board Resolution No. 5-2012 passed January 26, 2012 states that the loans are to be contracted with several banks (Land Bank of the Philippines, Philippine National Bank, United Coconut Planters Bank) and LWUA itself.
But the resolution does not clearly state where the money will be spent or which projects it will be used, however.
This corner was informed by MIWD insiders that MIWD doesn’t need the loans because it currently has money from savings and collections adequate enough to fund its daily operations. The same insiders tell us that as of now there are no big ticket projects “on the table”. So far, the MIWD has only contracted a consortium for its bulk water project but MIWD is not spending anything for the project.
So what is the purpose of the loans?
Of the total P150 million in loans, the resolution states that P50 million will be sourced from LWUA.
Insiders say that MIWD’s capacity to pay off these loans is suspect. In the event that the loans are realized and MIWD’s finances can’t cope with its payables and becomes insolvent, LWUA has the right to take over its operations as provided under the law governing the water districts in the country.
The news about the fresh loans came hot in the heels of a case filed by the Encarnacion board questioning the legality and validity of the existence of the interim board. The case is gathering dust in the Court of Appeals in Cebu more than a year after it was filed. The Encarnacion board or the old and original board appointed by Mayor Jed Mabilog, the appointing authority under PD 198, contends that it is the legal and rightful board. They also contend that LWUA is simply a financing institution and it has no right to take over MIWD’s operations much less stock the board with its own people unless the water district has defaulted on its loan.
Did LWUA through its own people now ruling the interim board hatch the fresh loans to cure the legal defect in the interim board’s existence? The question begs for answer so much so that there seems to be a conflict of interest here between the interest of LWUA and the future of MIWD.
Meanwhile, the consumers continue to suffer from water shortage.
By: Lucell Larawan
By: Alex P. Vidal
By: Juan L. Mercado
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