Subject to a reduced rate proposal, the Clark Development Corporation (CDC) ultimately agreed to give Clark Water Corporation (CWC) notice to proceed with its Compliance Action Plan (CAP).
This, after the CWC, a subsidiary of Manila Water Company, Inc., agreed to CDC’s condition of capping the rate increase at P4.35 per cubic meter (/ m3) over a four-year period.
The CDC’s CAP complies with administrative decree 2016-8 (DAO 2016-8) of the Ministry of the Environment and Natural Resources (DENR), which defines water quality guidelines and general standards relating to effluents for public and private services.
The negotiation of the terms of the CAP was the subject of discussions between the CDC and the CWC even before the chairman of the CDC, Manuel R. Gaerlan (retired) took control of the state-owned company.
It took another three months for CDC and CWC under Gaerlan’s leadership to come to a workable deal.
CDC’s main argument against CWC’s original proposal is the resulting Extraordinary Tariff Adjustment (ETA) of 24.70 P / m3 for water and wastewater.
The proposed ETA was reduced to P11 per cubic meter after CDC rejected the original proposal.
According to CDC, CWC argued earlier that they will spend around 1.4 billion pesos to implement their solution with the use of membrane sequenced reactor (MSBR) technology.
For its part, CDC engineers proposed the use of a hybrid bio-phyto-remediation solution that incorporates microbial reactors with a reed bed to meet effluent standards for ammonia, nitrates and phosphates.
The CDC solution has been said to involve a much lower capital expenditure and up to 30 percent of operational expenditure compared to that of CWC’s MSBR technology. The CDC argued that the lower costs will result in much smaller rate adjustments.
BioCleaner Corporation, a US-based company approved by the US Trade Department of the US Embassy, estimated that the tariff adjustment using their technology would be between P3.08 and P4.35 per cubic meter.
The bio-remediation approach costs a fraction of the CWC setup and requires much less power consumption.
The CDC said it had to make a decision that favors its locators amid pressure from the DENR and the regional director of the Environmental Management Bureau (EMB).
Earlier this month, Environment Secretary Roy A. Cimatu came to Clark and met with representatives from the CWC and CDC.
After his visit, he tasked DENR Under Secretary for Policy and Planning Jonas R. Leones to ensure CWC compliance with DAO 2016-8.
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