WE ARE on the fourth series of this contentious and debated undertaking. We will proceed directly to the points raised by our resource lawyer.
“II. PRICE ADJUSTMENT
1. The selling price of bulk water by BWUI as stipulated in II.1 above is subject to adjustment (increase or decrease) as follows:
If the change in power cost per kwh during the six-month period exceeds 5%. The review is done every six months and the adjusted price per cubic meter shall take effect in the month immediately following the review period. The following formula shall be used to determine the amount of adjustment per cubic meter.
PCA = (BWR × 0.70) × PCC
Whereas:
PCA = Power Cost Adjustment
BWR = Basic Water Rate
PCC = (PCI-PCO)/PCO
Whereas:
PCO = The power cost per kwh at the time of the effectivity of Agreement
PCI = The average power cost per kwh during the review period
If the change of the Consumers’ Price Index during the year exceeds 5%. The review is done every year and the adjusted price per cubic meter shall take effect on the succeeding year. The following formula shall be used to determine the amount of adjustment per cubic meter.
CPIA = (BWR × 0.30) × CPIC
Whereas:
CPIA = Consumer Price Index Adjustment
BWR = Basic Water Rate
CPIC = (CPIa-CPIb)/CPIb
Whereas:
CPIa = The average consumer’s price index during the year
CPIb = The consumer’s price index at the effectivity of the MOA
Based on 1a and 1b above, the adjusted selling price per cubic meter which is the basis of BWUI monthly billing to the MUNICIPALITY shall be as follows:
CPIA = (BWR × 0.30) × CPIC
Whereas:
ASP = Adjusted Selling Price
BWR = Basic Water Rate Section 2 Article II
PCA = Power Cost Adjustment
CPIA = Consumer Price Index Adjustment
2. The MUNICIPALITY should be notified by BWUI of any application for water rate adjustments filed by BWUI with the NWRB.”
Comment: THE MUNICIPALITY SHOULD BE GIVEN PREFERENTIAL RATES AT ALL TIMES. If the basis of the escalation rate is CPI, the question is – CPI where? Tagbilaran City? National? It is suggested to proceed with caution here and clarify the basis of the CPI.
“III. AMENDMENTS
This agreement or any part or portion thereof shall be modified or revised when initiated by both parties through formal written agreement between the parties hereto, citing therein specific clause or provisions to be revised and the corresponding amendment/s thereto.”
Comment: Both parties? – meaning the Municipality cannot initiate modifications WITHOUT the consent of BWUI. Basically, the Municipality is at the mercy of BWUI.
“IV. DISPUTE RESOLUTION
Any dispute, controversy or claim arising out of or relating to this agreement, or the breach, termination or invalidity thereof shall be settled by arbitration in accordance with the Arbitration Rules of the Philippine Dispute Resolution Center, Inc. (PDRCI) of the Philippine Chamber of Commerce and Industry.”
Comment: PDRCI is a nonstock, non-profit organization, why should the LGU submit to its jurisdiction? (https://www.pdrci.org/about-us/)
“V. ASSIGNABILITY CLAUSE
BWUI may assign the rights and obligations to this Agreement upon written notice to the MUNICIPALITY. The assignment shall stipulate that the provisions or stipulations and terms and conditions of this Agreement will bind the Assignee.”
Comment: VOID. The SB Resolution did not authorize the assignment of rights. Even if “authorized”, this provision is only beneficial to BWUI, and will force Balilihan to accept the “new assignee” without prior consultation, since only prior notice is required.
“VI. TERM AND EFFECTIVITY OF THE AGREEMENT
1. The term of this Agreement shall be twenty-five (25) years renewable for another 25 years upon mutual agreement of the parties.
2. This Agreement shall be effective upon date of signing of this MOA by both parties and shall remain valid and enforceable for a period of twenty-five (25) years, reckoned from the date of its effectivity, unless sooner or later terminated in accordance with the provisions of this Agreement and applicable laws of the Philippines.”
Question: WHO ARE THE PARTIES HERE? The SB Resolution authorized the Mayor to sign a MOU, not MOA. There is a huge difference between the two.
(To be continued)
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Writer can be reached at belindabelsales@gmail.com. Twitter @ShilohRuthie./PN
