Iloilo Bulk Water Deal—A Step Backward?

By Francis Allan L. Angelo

The proposal by Aboitiz InfraCapital Inc. to take over the Iloilo Bulk Water Supply Project has raised significant concerns among local stakeholders, particularly regarding the potential financial burdens and risks it could impose on the province and its residents.

At the heart of the issue is whether the deal, as it stands, truly serves the best interests of the people of Iloilo or primarily benefits Aboitiz.

Is It Justified?

Water is a fundamental human right, and access to clean, affordable water is essential for the health and well-being of the population.

However, the involvement of Aboitiz in the Iloilo Bulk Water Supply Project is likely to be debated. While the company’s experience in infrastructure development is well recognized, one must question whether the province truly needs Aboitiz to manage its water resources.

Given the available alternatives, such as direct partnerships between distribution units like the Metro Iloilo Water District (MIWD) and the National Irrigation Administration (NIA), one must ask: Is there a need for a private sector intermediary, especially one that imposes significant financial obligations on the government?

Government-to-Government (G2G) Alternatives

The possibility of MIWD and similar distribution units directly engaging with NIA through a government-to-government (G2G) arrangement deserves serious consideration. Such partnerships could streamline operations, reduce costs, and eliminate the need for an additional layer of bureaucracy.

By keeping the management of water resources within government institutions, the province could retain greater control over pricing and distribution, ensuring that public interest remains the priority.

Instead of relying on Aboitiz or similar corporations, local government units (LGUs) could step in to support distribution companies by providing them with the resources and backing necessary to manage water supply effectively. This approach would prevent the creation of an additional layer of profit-driven management, which could result in higher costs for consumers.

By empowering local entities, the province can maintain a focus on public service rather than corporate profit.

Profiting from Public Need

The crux of the concern lies in the financial structure of the proposal.

The PHP 8.45 billion plan to supply 80 million liters of treated water per day comes with strings attached—strings that could strangle the province’s budget.

The inclusion of an “availability fee,” which requires the provincial government to cover costs even if the water is not purchased, is particularly alarming. This fee shifts the financial risk from the private sector to the public, meaning that taxpayers could end up footing the bill, regardless of water consumption levels.

The availability fee contingency is similar to the “take-or-pay” provision in the power industry, which has been a source of consternation among consumers who disdain paying for electricity they do not use.

One of the most concerning aspects of the proposal is the potential impact on water prices. The suggested rate of PHP 51 per cubic meter is more than double the current rate of PHP 20 per cubic meter for the first 10 cubic meters consumed by residential users.

Such an increase would place a heavy financial burden on Iloilo residents, many of whom are already struggling with rising costs of living. It begs the question: Why make money at the expense of the people?

Water is not a luxury but a necessity, and making it more expensive would exacerbate the financial strain already felt by many households. The proposed deal appears to diverge from the principles of a traditional Public-Private Partnership (PPP), where the private entity assumes the financial risk.

Instead, the proposal shifts that risk onto the government, making it more of a Public-Risk Private-Profit (PRPP) arrangement—a deal that benefits Aboitiz more than the people of Iloilo.

Caution and Transparency

As the provincial government, led by Governor Arthur Defensor Jr., continues to evaluate the proposal, it is crucial that the process remains transparent and considers the long-term implications for Iloilo’s residents. The Defensor Jr. Capitol must weigh the potential benefits against the risks and costs and ensure that the interests of the public are not overshadowed by the pursuit of profit.

The current delay in the evaluation process, although concerning, also provides an opportunity for thorough analysis and public consultation. The voices of the people—those who will ultimately bear the cost of this deal—must be heard and taken into account.

The Aboitiz water deal presents a pivotal moment for Iloilo. The decisions made today will have lasting impacts on the province’s future, both financially and in terms of public trust. As the evaluation continues, it is imperative that the provincial government considers all alternatives, prioritizes transparency, and upholds its duty to protect the interests of its constituents.

Water is a basic need, and its management should not be driven by profit but by the fundamental goal of serving the public good.