Sorsogon City Water District entered into a Joint Venture Agreement with PrimeWater Infrastructure Corp. for the Financing, Development, Rehabilitation, Expansion, Improvement, Operation and Maintenance of the Water Supply and Septage System of Sorsogon City Water District on June 2, 2016. Commencement date of the project was on October 17, 2016.
SCWD, as the Contract Monitoring Unit,has the following functions: Strategic Planning and Policy Setting, Asset Management Supervision, Customer Relations, Tariff Setting, Performance Review and Monitoring and other functions that may not be delegated pursuant to Presidential Decree No. 198.
As operator of the concession, contractor and agent of SCWD in the JV area, PrimeWater has the following functions:to finance, develop, rehabilitate, expand, improve, operate, and maintain all water supply system and septage management in the JV area; bill and collect total tariff from consumers within the JV area; submit reports and remit revenue share to SCWD as agreed in the JV Agreement; and such other functions as may be required by SCWD.
The JV Agreement provides that on Commencement Date (October 17, 2016), there shall be no increase on the initial tariff. It also provides that for the first five years, there shall be an increase in basic tariff of 39% for all blocks and consumer categories to be implemented on a staggered basis.
Beginning October 17, 2017 or Year 2 of the JVA, a 12% increase for Value Added Tax was implemented. A 27% tariff increase was due for implementation effective October 17, 2018, or Year 3 of the JVA Agreement.
On August 22, 2019, the National Water Resources Board issued Certificate of Public Conveyance to PrimeWater Infrastructure Corp. to operate and maintain waterworks system in Sorsogon City, with authority to charge the approved rates as provided for in NWRB Resolution No. 09-0819. Consequently, on February 17, 2020, PrimeWater informed the SCWD CMU that they will be implementing the NWRB-approvedtariff rate.
On August 13, 2020, the SCWD Board of Directors passed Resolution No. 16-2020 or the “Resolution Deferring the Approval of the Request for Tariff Rate Increase by PrimeWater Infrastructure Corp. under Section 8.2.2 of the Joint Venture Agreement Executed on June 2, 2016.”
The SCWD BOD deferred the approval of PrimeWater’s request for tariff rate adjustments until such time the PrimeWater is able to meet the conditions set by the SCWD BOD. These conditions are: (1) revision of proposed tariff rates; (2) compliance to service obligations on service coverage, provision of continuous water supply to all connected consumers, drinking water standards, septage management, and adoption and implementation of the SCW Water Safety Plan; (3) submission of 2020 comprehensive short-term plan; (4) prioritization of additional water source development project such as Rangas River and San Lorenzo.