By RALPH JOHN MIJARES
ROXAS City — The Metro Roxas Water District (MRWD) plans to increase its rate by as much as 29 percent to, among others, pay for its loan with the Local Water Utilities Administration (LWUA).
As of May this year, the water district’s principal loan balance is P1,081,052,465, MRWD information officer Dante Arcangeles told Panay News in a text message yesterday.
The loan has been due since 2011. The current interest rate is 8.5 percent, but this varies depending on the amortization schedule, Arcangeles said.
MRWD general manager Gonzalo Glen Delgado had said the water district had been trying to acquire a take-out loan with the Development Bank of the Philippines (DBP) in the hope of getting a lower interest.
LWUA’s Board of Trustees approved a P25-million take-out loan with DBP but has yet to give an authorization, Delgado said.
During the Sangguniang Panlungsod session on Tuesday, Delgado said MRWD plans to acquire another P827-million take-out loan with DBP.
He said MRWD needs to increase its rate to:
- * meet its projected debt service requirements, including capitalized interests and regular monthly amortization payments, for its LWUA loan
- defray the expenses needed for the efficient daily operation and maintenance of its water production, storage, distribution and customer service delivery systems, particularly in view of the rising cost of chemicals, fuel, electricity, repair and replacement parts, and other necessary plant and office supplies
- improve its critical cash reserves position for contingency and emergency purposes; and
- fund its planned capital expenditures needed for projected service expansion, provision of additional water supply capacity in 2017, and further nonrevenue water reduction.
Delgado said the proposed rate increase, which was supposed to start January this year, is still pending LWUA’s approval.
He said there are three scenarios surrounding the proposal:
- No water increase by 2014, with P25-million take-out loan with DBP – this would lead to negative projected net cash flows from 2014 to 2018 and negative projected total ending cash balances from 2016 onwards;
- 29-percent water rate increase in 2014, with P25-million take-out loan with DBP – this would lead to positive projected net cash flows and total ending cash balances from 2014 onwards; and
- 10-percent water rate increase in 2014, with P25-million take-out loan with DBP, plus P827-million 15-year take-out loan with DBP – this would contribute to a negative projected net cash flow in 2014 and positive cash flow amounts from 2015 onwards, and positive total ending cash balances from 2014 onwards.
Delgado said MRWD prefers the third scenario, which would be “less burdensome for consumers.”
Amid the possibility that MRWD would get mired in debt, Delgado assured of continued satisfactory service to consumers.
“Customers will be assured of continuous sufficient supply of high quality treated water and satisfactory water pressure 24/7,” he said. “Moreover, MRWD’s repair, maintenance and customer service will be kept at very satisfactory levels.”/PN
