Camarines Norte's PrimeWater allegedly avoided accountability, leaving locals in a predicament
Rebellious Service: Residents of Camarines Norte Battling Overpriced, Deficient Water Supply from PrimeWater
A long-awaited pre-termination notice has been served to notorious water firm, PrimeWater, after years of dreadful service and auditor scrutiny, leaving residents trapped in a 25-year contract.
As Oliver Pardo, a member of consumer welfare group Sarakduhan, put it, "We don't know what's going to happen next, but we feel caught in Camarines Norte."
Documents reveal that the 2016 joint venture agreement between the Camarines Norte water district (CNWD) and PrimeWater had flaws from the start, but it took years of bad service to finally get executed in 2023. This pre-termination notice triggers an arbitration process, a move Pardo fears will be dragging by PrimeWater's legal maneuvers.
The Commission on Audit (COA) had already flagged PrimeWater for "indicative overpriced" projects with "deficient" services as early as 2023. This indicates potential expenses jacking to charge higher tariffs according to experts consulted.
"They turned us into their milking cows," Pardo loathes.
PrimeWater is under investigation by the Local Water Utilities Administration (LWUA), spurred by complaints coming from residents in multiple Luzon regions.
PrimeWater is a Villar family endeavor, with extensive ties to the political sphere. Siblings Mark and Camille currently hold senator positions, while parents Cynthia and Manny were former senators. Manny is the Philippines' wealthiest individual, according to Forbes.
Despite our attempts to contact PrimeWater via their public information officer and publicity head, we received no response. Our requests for interviews to offices of the Camarines Norte water district and Governor Ricarte "Dong" Padilla also remain unanswered.
Auditing Chaos
A 2023 audit report presented damning allegations, stating that PrimeWater's capital expenditures were three times higher than initially estimated by the CNWD. A cost variance of 69% has raised red flags for concerned economists.
"That's how they make big money," said Even Calajate, a former water district board member.
The agreement also lacked strong penalty clauses, allowing PrimeWater to shrug off various auditor red flags, such as inefficient collection mechanisms. In 2020 alone, not only was PrimeWater inefficient in collecting from consumers, but it also failed to remit the due amount to the water district on time.
The review reveals that the agreement was flawed from the start, including an baseless revenue sharing scheme and missing penalty clauses.
Poor Performance
Delivering inefficiencies, PrimeWater's services included below-target service coverage, lack of septage management, poor water supply, and non-compliance with drinking water standards. The mismanagement has led to further issues downstream, jeopardizing public health.
Turbid water and insufficient water filters have been the problems of residents for quite some time, according to Joshua Guinto of Sarakduhan.
By 2023, the water quality failed to meet the drinking standard, and the lack of septage system threatened waste water to be discharged into river systems.
Rising issues with the Villar-owned company have escalated over the years.
Governor Padilla wrote a letter to the water district in 2024 demanding immediate action, but it wasn't until March 2023 that the pre-termination notice was sent.
Pardo expressed frustration on behalf of the people, stating that "the people of Camarines Norte should know why this joint venture was entered into and who the culprit is. Pressing charges against PrimeWater would be ideal."
A Failed Agreement
The audit reports have shown that the agreement was flawed from the start. The revenue sharing scheme had no basis, with PrimeWater supposed to remit a fixed amount to the water district per year, increasing by P1 million every five years.
The agreement also failed to include some penalty clauses, causing PrimeWater to ignore auditor red flags such as inefficient collections.
Inefficient collections, insufficient capital expenditures, and missing penalty clauses may have been behind the deficient service and inflated spending, contradicting the terms Prime Water set forth in section 8.1.1 of the 2016 JVA for tariffs to only cover project costs during the joint venture term.
Unsavory Situation
Residents in Camarines Norte have suffered due to poor water supply and high costs. An eatery owner shared how they hire children to fetch water for P20 per gallon while missing classes, while electric pumps have become necessary to purchase water from deeper wells in Daet.
Despite having no consumption, residents continue to face high water bills. Tricycle driver Roger Galvez finds it hard to believe when told that bills are issued only for consumed water.
Water shortages and poor quality have caused widespread public anger and mistrust in the Villars. When talks of a PrimeWater joint venture started, Pardo said, "There were rumors of irregularities that caused significant conflicts."
Though water districts are an GOCC (government-owned and controlled corporation), LWUA supervises them. While they are not directly under local governments, the approval of board members and mayors or governors is required.
"I was not the governor then so I did not have the power to monitor CNWD and PrimeWater," said former longtime Governor Edgardo Tallado who served from 2010 to 2022 during the JVA signing.
Insights:Residents have faced long-running frustrations and have not seen solutions, with reports of murky water, insufficient supply, costly tariffs, and political and electoral backlash against PrimeWater-affiliated politicians in affected areas. A Senate investigation has been initiated to probe into prime water contracts, and current actions indicate ongoing public scrutiny and pressure.
Footnotes:
- https://www.gmanetwork.com/news/business/investigative/781758/sakripisyo-na-merong-puno-mo/story/
- https://www.rappler.com/nation/elections/2022/campaign2022/425381-discontented-voters-dont-vote-unpopular-candidates
- https://www.bworldonline.com/camarines-norte-issues-pre-termination-notice-to-primewater/
- https://www.senate.gov.ph/today/2023/0301_59.asp
Origin:
our website.com
- The ongoing saga in Camarines Norte, surrounding the water supply, has escalated to a political level, with residents demanding accountability from PrimeWater, a company with ties to prominent politicians.
- In the realm of business and finance, the investigation into PrimeWater's operations and contracts could have far-reaching implications, potentially revealing questionable practices in the water sector and a need for tighter regulation and oversight.
