Davao City Water District (DCWD) is bound to impose a 60 percent water rate hike by middle of next year.
DCWD spokesperson lawyer Bernard Delima announced in Wednesday’s Habi at Kape media forum that the city’s water provider is likely to impose new rates after going through the process of submitting all requirements of regulating agency Local Water Utilities Administration (LWUA) in increasing water rate.
Although, the rate is still in the clouds, Delima affirmed they proposed to apply for a 60 percent increase.
“The 60 percent should be reckoned from the minimum rate of P137.30. Kung imo siya tan awon Kung pila ang 60 percent, that is around P82 or P83 then add to the minimum rate, that is the 60 percent increase. That is if we implement the 60 percent and if it will be approved by LWUA. We are only assuming that 60 percent will be approved,” he said.
Assuming the 60 percent would be approved, Delima said they will not be implementing the 60 percent fully in the same year but in tranches.
“Like on the first implementation it would be 30 percent, on the next year 20 percent, on the next year it would be 10 percent or 30 percent on the first year of implementation and the next 30 percent will be 10 and 10 and 10 percent for the next three years because we cannot afford to implement it in full on the same year,” he said.
He said LWUA requires application for water rate should not exceed 60 percent of the current water rate and the minimum rate.
“Assuming that we will fully implement the 60 percent. The 60 percent of the current minimum rate for the first 10 is P137.39 for the first 10 cubic meter, 60 percent of that is P82.38 centavos divide it to 30 days the result is P2. 75 per day. But if it is only 30 percent that is only P41 then add to P137,” he said.
Delima explained they need to increase water rate because in 2020 their projected revenue is around P2.7 billion.
“Our operating expenses would be around P2.3 billion and our capital outlay like improvements on infrastructure is P1.7 billion which is a total of P4 billion. We have a cash deficit of 46 percent by 2020 if we don’t increase our water rate,” he said.
According to Delima, DCWD does not get any centavo from the national and local government. He added their budget for next year is dependent in the revenue generated in the previous year.
“Pa- ikot ikot lang yan, if you have low revenue this year, you have lower budget for next year. Ganyan lang yan,” he said.
LWUA has required DCWD to submit financial record in the last five years and business plan for the next 10 years. Delima said LWUA will still have to review the application for a 60 percent water rate increase. When approved, DCWD will conduct a public hearing and consultations.
“After the public consultations the LWUA and the board will again convene whether we have met all the requirements for water rate increase. if LWUA finds 60 percent too high we will likely lower it down,” he said.
The last time DCWD implemented a water rate increase was in 2005 that was also a 60 percent hike, which is the maximum allowable approved by LWUA.
“We hate water rate increases that is why it doesn’t come very often. To get a water rate increase is very difficult undertaking. The prizes in 2005 had actually increased by 60 percent. The cost of doing business in Davao City increased by 60 percent since 2005. I don’t know if the taxes and TRAIN are factored in. We buy chlorine from private entities, we buy anything from the business entities, ” he said.
