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La Union clients OK water firm’s privatization

SAN FERNANDO CITY, La Union—Water consumers in the four towns of La Union and this city showed their unity when they unanimously agreed to privatize the water-distribution system in the province during a multisectoral consultation conducted by the provincial government.

Gov. Victor Ortega ordered the consultation to be held to “feel the pulse” of water consumers from the towns of Bauang, Bacnotan, San Gabriel and San Juan and this city.

“We can feel the clamor for the improvement of water system. But before we can take a single step for the privatization, we want first to know the stand of the people before we start the project,” Ortega said during the consultation held at the Diego Silang Hall.


Around 200 people attended the consultation, including directors and employees of Metro La Union Water District (MLUWD). Participants unanimously agreed when Ortega asked them if they wanted an improvement in the water system.

Before the provincial government can start the privatization, they must have to take over the operation of MLUWD, a government-owned water company under the supervision of Local Water Utilities Administration (LWUA).

Ortega said they already paid the P15,267,481-debt of MLUWD to LWUA, including P3.5 million at the Land Bank of the Philippines.

“We paid for the water district’s liabilities so we can privatize it and improve our water system,” Ortega told The Manila Times in an earlier interview at the Oasis Country Resort here where he also got the unanimous support of the Rotary Club of San Fernando members for the project.

Dr. Angel Lazaro, World Bank consultant, briefed the participants on the project, which will cost about P400 million to P500 million. Funds for the construction will be shouldered by the winning bidder.

Lazaro said the project aims to improve the efficiency, safety and widen the coverage of water services and supply. “Good water system is important for the economy of the province,” he said.

Ortega said if the privatization starts, all the 84 employees of MLUWD will be absorbed because the new water project needs at least 200 personnel. A financial package was also included in the bid documents, which stated that the winning bidder would pay the employees one month for every year of service if they will continue to work once the water company will be privatized. But if they prefer to retire, they will get two months pay for every year of service.

The MLUWD union initially protested the privatization because they feared losing their jobs and the provincial government allegedly did not have a concrete plan to assure that they would keep their jobs.

They also raised objection because the provincial government allegedly applied for a loan from the World Bank in exchange for the privatization of MLUWD.

After the privatization, Lazaro explained that the provincial government will remain the owner of the project. The winning bidder or concessionaire will only manage and operate it.

He said the P145-million loan of the provincial government to the World Bank is to subsidize the free connection of around 8,000 poor households, P10 million for construction supervision and P15 million payment of the MLUWD debt at LWUA.

By Jun Elias

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