One by one, the prime established water districts in the country are falling into the hands of—well, who else—the PrimeWater Infrastructure Corp. headed by former senator Manny Villar. It’s an entrepreneurial blitzkrieg the local water providers succumb to as the elements of surprise, maneuver, concentrated force, and sweet promises overwhelm the puny defenses of local water institutions and systems.
PrimeWater says it now provides 500,000 households with 300 million liters of treated water daily from deep wells and surface water sources it operates. Actually, it has privatized or has forged joint ventures with over 70 water districts, the primary water service providers in many cities and municipalities.
While Metro Manilans are aghast at the recent fumbles of Maynilad and Manila Water in supplying the water needs of the metropolis after the much-vaunted privatization of water services, PrimeWater has been systematically taking over the operation of the water districts of many of the country’s prime cities and municipalities.
As in a blitzkrieg, the strategy is multipronged. To start with, PrimeWater has a captive market. It is the water provider of real estate projects identified with the Villars: Brittany, Crown Asia, Camella Homes and Vista Land & Lifescapes.
Next, PrimeWater engages water districts in bulk water supply, capacitation and management. What this means, in effect, is the takeover by PrimeWater of the control of water district operations, including the wholesale replacement of its personnel. Water district officials suspect the political influence of the Villars powers this invasive campaign. It may also be the result of a long-standing ambiguity about the legal personality of a water district—is it a private corporation (per Presidential Decree No. 198) or is it a nonstock, government-owned or government-controlled corporation?
The blitzkrieg has reaped strong dissatisfaction and opposition among PrimeWater-engaged water districts. The Zamboanga City Water District rationed water in January 2019 because PrimeWater supplied only 28.8 million liters a day (MLD), far from the PrimeWater contractual commitment to provide 50 MLD.
The Guagua Water District was cited by the Commission on Audit’s 2018 annual report as producing water from eight of 13 pumping stations that had twice the allowable level of arsenic.
In San Pablo, the Water District Employees Association president reported that consumers now pay almost P1,200 per month, up from P400 before privatization. He suggested the same goes for similar water districts that have been privatized in the south—in Metro Quezon, Lemery in Batangas, Los Baños in Laguna, Batangas City and Rosario in Batangas, and Daraga in Albay.
In Iloilo City, the Metro Iloilo Water District sued the city council for issuing a water supply franchise to PrimeWater. The complaint alleged, among others, that the franchise undermines the water district’s joint-venture agreement for the rehabilitation, upgrading, expansion, development, operation and maintenance of the water system in Iloilo City and seven adjoining towns.
Certainly, there has been a need to improve the operation of water districts all over the country. An Asian Development Bank report said many local government units (LGUs) show “little interest in pursuing water supply projects due to local leadership uncertainties brought about by 3-year electoral terms.” The World Bank in turn reports that “in general, water utilities under direct LGU management are poorly operated because of the lack of technical, financial and management capabilities at the local level.” This situation has goaded many LGUs to rush into the arms of private enterprises like PrimeWater.
But there is need to check whether the solution fits the problem. There are about 1,000 LGU-run water utilities. Are the water districts engaged by PrimeWater the utilities that need the greatest help, or are they the ones simply with the greatest profit potential? This may not be an issue for a private enterprise like PrimeWater, but it should be for the government and the people. This is especially so since studies show that the poor masses pay much higher water prices than higher-income households because of their lack of access to water service providers. So, let’s do due diligence on the PrimeWater blitz. As Murphy cautions, perhaps “The light at the end of the tunnel is the headlamp of an oncoming train.”
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