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TheMonitorMindanaoToday.com | COA Flags ‘Middleman’ Setup in CDO Water Supply Deal
CAGAYAN DE ORO CITY – The Commission on Audit (COA) has flagged a joint venture involving the city’s bulk water supply, citing concerns over significantly increased water costs that have burdened local consumers.
In its Special Audit Office Report No. 2026-02, state auditors found that the joint venture firm, failed to construct an independent water treatment facility as originally promised. Instead, COBI allegedly functioned as an intermediary between the Cagayan de Oro City Water District (COWD) and its initial supplier, Rio Verde Water Consortium Inc.
According to the report, this setup led to a sharp increase in bulk water rates—from P10.45 to P11.52 per cubic meter under Rio Verde, to as high as P21.60 per cubic meter by 2024.
COA noted that the agreement was disadvantageous to both the government and the public, and that it bypassed the 2013 public-private partnership guidelines set by what is now the Department of Economy, Planning, and Development (formerly NEDA).
Auditors also questioned COWD’s reduced stake in the joint venture, which dropped from the proposed 10% to just 5%, resulting in lower dividends and diminished management influence for the water district.
Residents have also raised concerns over water quality. One consumer reported having to frequently replace faucet filters due to the buildup of dirt and debris within hours.
The audit further revealed that COWD continues to exceed the 20% threshold for non-revenue water, referring to water losses due to leaks, inefficiencies, or unbilled usage—adding to operational costs.
COA has recommended that COWD pursue legal action regarding the contract, address water losses, and work toward reducing bulk water costs.
COWD Welcomes Audit Findings
Despite the critical findings, COWD officials stated that they had requested the special audit themselves. Board Chairperson Dr. Gerry J. Caño said the results validated concerns previously raised by the current board.
He explained that a team of auditors conducted inspections, interviews, and evaluations over a month-long period beginning in August 2025.
Caño also noted that COBI declined participation in the audit, asserting that COA has no jurisdiction over private entities.
Next Steps and Challenges
COA has urged COWD to explore legal remedies. The water district is now coordinating with the Office of the Government Corporate Counsel to determine possible actions.
However, addressing system losses may require increased funding. Caño acknowledged that reducing non-revenue water would likely necessitate a rate adjustment, as the district does not receive subsidies from either local or national government.
COWD is currently implementing a 10-year development plan aimed at improving efficiency and reducing water losses.
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