30-year contract with consortium for SRP water supply inked

05/30/10 - CEBU CITY — Cebu City Mayor Tomas Osmeña signed Friday last week a 30-year contract with a consortium comprised of Pilipinas Water Resources Inc. (PWRI), Mactan Rock Industries and businessman Michel Lhuillier for the supply of water in the South Road Properties (SRP).

The consortium entered into a joint venture with the Cebu City government to operate the city's two desalination plants in the SRP and supply water to the locators there for 30 years.

The contract-signing was delayed by two hours because Osmeña ordered revisions in the 11-page contract which would have included a provision for the city to contribute land to the joint venture.

Instead of "contributing land to the joint venture," the city's obligation to the suppliers in the contract was changed to "allow the use of land for the desalination plants, wastewater treatment facilities, pipelines, collection tanks, etc."

Under the contract, the consortium, through a joint venture with the city, will manage and operate the city-owned desalination plants and construct new desalination facilities and potable water distribution system facilities in the SRP.

The consortium will produce 350 to 500 cubic meters of desalinated water a day, which could increase as operations progress.

The city stands to get P10 per cubic meter in excess of the first 30 cubic meters of potable water for every locator per month, referring to potable water generated and distributed from the plant.

It will get P5 per cubic meter in excess of the plant's original capacity of 550 cubic meters a day.

For wastewater treated in the facility, the city will get a share of as much as P5 per cubic meter and P1.50 per cubic meter for non-potable water produced from the wastewater treatment plant.

The PWRI will sell potable water to locators at P14 to P47 per cubic meter, with a graduated price scheme, depending on the consumption of the client. At no time shall the water rates be higher than the rates of the Metropolitan Cebu Water District (MCWD).

Non-potable water will cost P20 per cubic meter, while wastewater will cost P25 per cubic meter.

The city council held an executive session last Monday to tackle the contract, which the mayor identified as an urgent concern.

A stable water supply in the SRP is among the requirements of Filinvest Land Inc. and SM Prime Holdings Inc. before they start developing their properties in the SRP. (PNA)