Baguio water contract junked

BAGUIO CITY -- The board of directors of the Baguio Water District cancelled the contract for a multi-billion-peso bulk water project aimed at ensuring steady supply of potable water to the people of this mountain resort city.

This developed after the water district and the complying and winning bidder failed to agree on the buying water rate.

The ambitious bulk water project seeks to provide BWD a daily supply of 50,000 cubic meters of potable water which is to be supplied to the thousands of households in this city.

Teresita de Guzman, BWD general manager, said the board decided to cancel the notice to proceed it issued to Benguet Corp. due to failure by both parties to agree on the rebasing of the buying rate of water to be supplied by the company.

Under the supply contract, Benguet Corp. is to provide the BWD with a minimum daily supply of 50,000 cubic meters of water at a rate of P39 per cubic meter for 25 years.

However, the firm is demanding that the buying price of water be increased from P39.99 to P53 per cubic meter.

De Guzman said the board cancelled the notice of award to the company because it could not grant the increase being demanded as the BWD is restricted by the New Government Procurement Act which provides that an increase in price after bidding requires the conduct of another tedious bidding process on the adjustment.

She said the project is aimed at looking for other sources of water which would augment the current production of the 53 water sources of BWD, considering the growth of population in the city.
At present, BWD produces 55,000 cubic meters of water per day from its 53 water sources in the different parts of the city, but 40 percent of its production is lost due to the dilapidated piping system, among other causes.

De Guzman said the bulk water project is intended to address the expected increase in demand for water in the coming years that comes as a result of urbanization.

The project has to wait for sometime to allow a committee to evaluate and review the terms of reference before conducting another bidding, she said.

At present, the estimated daily water needs of the people in the city is approximately 35,000 cubic meters. This could grow to as much as 80,000 cubic meters in the coming years, so there is an urgent need to pursue the bulk-water project.

The BWD is also implementing the re-piping system of its system to help reduce the high system’s loss to at least 25 percent, which is the acceptable loss in the water industry.

In 2001, the BWD secured at least P798 million in "soft" and regular loans for the upgrading and expansion of its system to conform with increasing demand for water.

Of the amount, P135 million was given to the water district as a grant, while the regular loan is paid one year after the completion of the re-piping project and the "soft loan" is to be paid in tranches five years.

The BWD said that the upgrading of the water system should be done every 10 years to ensure reliability of the system and improvement of the service. – Dexter A. See