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Ex-MNWD Board chair claims: GM misled consumers on water shortage

By Paolo Gabriel Jamer

The former chairman of the Board of Directors (BOD) of the Metro Naga Water District (MNWD) has accused its general manager of misleading customers and the members of the BOD that there was an impending water shortage in its area of coverage to justify the purchase of the P28.6-million lot as site of the proposed Bicol River Surface Water Treatment Facility (BRSWTF).

Engr. Emeterio “Boy” Aman, who chaired the MNWD BOD in 2021 and currently an incumbent director, made the accusation against MNWD General Manager (GM) Virgilio Luansing I in a radio interview over broadcaster Joe Osabal’s radio program “Asintado sa Radyo” on Monday, Feb. 21.

Aman said that the rest of the five-member MNWD BOD including Luansing finally accepted during the Feb.18 board meeting that indeed the water district incurred financial losses for the last three years, 2019-2021. This was after the Commission on Audit (COA) adjusted its audit report to reflect the correct figures.

Initially, the MNWD management denied that the water district was losing money from its operation. It even issued an official statement on Sept, 28, 2021, which was published in this paper, claiming a net profit of P4.2 million as of August 31, 2021,

According to Aman, the financial statement used by the MNWD management was not accurate because the advance collections for septage fee from its customers in 2018 up to the present were combined with the collection from water bills as income to cover up for the water district’s financial losses.

As early as last year, Aman in several radio interviews already raised the issue of the water utility firm’s financial losses including the questionable purchase by MNWD of lots in San Isidro and Mabulo in Naga City, the prices of which he said were over the Bureau of Internal Revenues (BIR) zonal values.

Aman claimed that based on the data presented during the Feb. 18 BOD meeting, Luansing admitted that there was no impending water shortage in the MNWD area coverage as the water district’s natural water sources and pumping stations can generates 2.1 million cubic meters of potable water, while only 1.4 million cubic meters are being billed and used by its customers.

MNWD serves the potable water requirements of Naga City and the five towns of Camaligan, Gainza, Canaman, Magarao, and Milaor, all in Camarines Sur.

According to Aman, the MNWD led by Luansing used the alleged impending water shortage to convince the BOD to approved the proposed BRSWTF and buy the lot where it would be constructed.

The MNWD BOD on Sept. 28, 2018 issued Board Resolution No. 127, s. 2018, approving the purchase of a 5,669 square meter land in Barangay Mabulo, Naga City for P 28.6 million.

Why MNWD is losing

In the same radio interview, Aman cited non-revenue water (NRW) and high personnel services (PS) costs as two of the major reasons why the water district is in the red.

According to him, MNWD’s NRW, averages 33 percent for the past three years when the allowable rate by the Local Water Utilities Administration (LWUA) for water districts is only 20 percent.

NRW is defined as the difference between the amount of water put into the distribution system and the amount of water billed to consumers.

Another reason, Aman said, is the high expenses of MNWD for PS, which expenses account for 49 percent of the water district’s total revenues, compared to other water districts in the country, which on the average only spend 30 percent of its income for PS.

PS refer to expenditure or expense for the payment of salaries, wages and other compensation (salary increase, personnel allowances, honoraria and commutable allowances, etc.) of permanent, temporary, contractual, and casual employees of the government.

As of January 31, 2022, the MNWD has a total manpower complement of over 652 consisting of 173 permanent employees, 179 casual personnel and over 300 contract of service workers (CSWs).

An MNWD insider told Bicol Mail that the MNWD management until now has not release the employees’ benefits for 2021 such as Service Recognition Incentive (SRI) in the amount of P10,000/employee, Gratuity Pay of P5,000/CSW and Productivity Based Bonus (PBB).

Even our 14th month pay or year-end bonus, which should have been given before Christmas last year was only released to us in mid-January this year.

Challenge to the BOD

Aman said he dared his fellow directors during the recent board meeting for them to resign en masse to give MNWD a fresh start.

According to him, he believed that there are three possibilities contributory to the financial losses of the water district for the past three years.

These are: 1. Incompetent GM; 2. Incompetent BOD members for giving the management wrong policy directions; and 3. Both GM and BOD are incompetent.

When asked what was the reaction of the board members to his challenge, Aman said his fellow directors were silent.

He said he was pushing for the preventive suspension or replacement of Luansing, in view of his mismanagement of the water district, but his move was not supported by the BOD members.

“If we are doing the same thing with the same people over and over again and then you are expecting a different result, that is foolishness,” Aman said to emphasized the need for radical change in the management of the MNWD.

GM Luansing’s side

In an interview with Bicol Mail, Luansing denied Aman’s accusation saying that he did not mislead MNWD customers that there was an impending water shortage to convince the BOD to acquire the P28.6 million lot for the BRSWTF. He said the facility is intended to provide additional source of water in anticipation for future demands and to prevent the depletion of ground water supply.

He added that the BRSWTF would solve the town of Gainza’s intermittent water supply and supplement Naga City’s source of potable water.

Luansing stressed that the water treatment facility will provide sustainability of water supply vis-a-vis the increase in the number of consumers in the years to come.

As to the excess number of personnel, he said he just inherited them when he assumed the MNWD management.

He also attributed the financial losses to the low price of water being charged by MNWD to its customers.

“The water rate that we have right now is based last 2009,” Luansing said.

The current water rate is not enough to keep up with the MNWD expenses at present. The high cost of electricity to operate the pumping stations worsened the operational expenses that resulted to these losses, he added.

“There should be a water rate increase every five years starting from 2009. However, last 2014, there was none. But during my term, I applied last 2018 and it was approved in 2019. The Covid-19 pandemic came and it was interrupted,” Luansing said.

He assured MNWD customers that they have enough funds to continue their operations and serve the concessionaires satisfactorily.


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