Careful, careful… Capitol

As the provincial government considers the PHP 8.45 billion proposal by Aboitiz InfraCapital Inc. to manage the Iloilo Bulk Water Supply Project, it must be acutely aware of the potentially severe implications for both taxpayers and consumers.

While the private firm cannot be faulted for seeking to ensure profitability—a fundamental aspect of any business—this does not absolve the Capitol of its responsibility to secure the best possible deal for the people of Iloilo.

The proposed arrangement raises several red flags, particularly concerning the financial obligations that would be transferred to the local government units (LGUs).

Under this proposal, the LGUs would be required to purchase water capacity regardless of whether it is used or not, effectively shifting the financial risk from the private sector to the government.

This setup is a significant departure from the standard Public-Private Partnership (PPP) model, where the private entity typically bears the brunt of such risks.

What makes this proposal even more concerning is its potential impact on water prices. The suggested rate of PHP 51 per cubic meter is a drastic increase from the current rate, which could place a heavy financial burden on Iloilo residents.

The provincial government, led by Governor Arthur Defensor Jr., is still in the process of evaluating the proposal, with a focus on confidentiality. However, the public deserves transparency on an issue that could so profoundly affect their daily lives.

While Defensor has asked for patience, it is imperative that the government not lose sight of its duty to protect the public interest.

Moreover, alternative models, such as Government-to-Government (G2G) transactions, have been highlighted as more favorable options. These alternatives could reduce costs, simplify operations, and avoid the need for an additional bureaucratic layer, all of which would be more advantageous for the province.

In this critical juncture, the Defensor Capitol must resist any arrangement that places undue financial strain on the public. Its reputation, however solid, is no reason to rush into a deal that could have long-term negative consequences. The government’s role is to negotiate terms that serve the best interests of its people, not to acquiesce to proposals that could lead to higher costs and unnecessary risks.

The provincial government must ensure that any agreement entered into is one that prioritizes the welfare of the public above all else. The consequences of failing to do so could be dire, not just for the province’s finances but for every citizen who relies on affordable, accessible water.