THE Commission on Audit (COA) has questioned the validity of the Joint Venture Agreement (JVA) between Marilao Water District and the Villar family-owned Prime Water Infrastructure Corp. signed on October 18, 2017.
The COA noted that the agreement did not have the approval of the National Economic and Development Authority (NEDA).
In its 2019 audit of the Marilao WD, the COA said the JVA should have undergone evaluation by the NEDA Board Investment Coordination Council (ICC) since the water district’s contributed assets was under declared at only P117.73 million when its real value was P212.64 million.
Auditors pointed out that the threshold amount set by the NEDA guidelines was only P150 million, hence the Marilao WD-Prime Water deal should have undergone the ICC’s scrutiny.
The COA noted that the computation of the contributed capital erroneously deducted outstanding loans totaling P79. 43 million and Construction in Progress (CIP) worth P15.48 million.
“Had the loans not been deducted, CIP included in the computation, and assets that have been converted in present value, the contributed capital would amount to P212,641,408.91 thus, the JVA should have been approved by the NEDA Board Investment Coordination Council,” the commission said.
Likewise, the COA found that the water district made additional investment in 2019 in the form of the installation of Steel Bolted Tank Ground Reservoir in barangays Lambakin and Loma de Gato which was not included in the computation of Marilao WD’s assets even if it cost the agency P3.21 million.
“We reiterated our prior year’s audit recommendations and the management agreed to hire/engage the services of an independent appraiser to determine the present value of the contributed assets before the start of the JV operation,” the COA said.