IN its last full year operating on its own in 2017, the San Jose del Monte City Water District (SJDMC WD) posted an income of P126.477 million.
On May 16, 2018, it entered a joint venture agreement with Primewater Infrastructure Corporation.
By yearend 2018, seven months into the JVA, San Jose Water’s net income dropped by a whopping 58 percent to only P53.6 million.
By 2019, the first full year of the JVA in effect, the water district’s net income was down to just P2.265 million or a 98 percent decrease compared to 2017, the full pre-JVA year.
But the worst was yet to come.
In 2020, San Jose Water posted a negative net income of P5.348 million from collections of P125.74 million against expenses totaling P131.09 million.
State auditors were alarmed at the decline, tracking the years before the JVA when the water district’s net income had been consistently high.
“The District’s annual net income starting CY 2018 was substantially lower than its net income in 2015 to 2017. The District had a good financial performance from CY’s 2015 to 2017 prior to entering into the JVA,” the audit team pointed out.
The 2022 audit of the San Jose Water released last March 21 showed the great disparity.
The water district had a net income of P187.502 million in 2015; P187.562 in 2106; and P126.477 million in 2017. These were the pre-JVA figures.
By 2018, the income declined to P53.604 million; P2.265 in 2019; negative P5.348 million in 2020; P1.524 million in 2021; and P3.973 million in 2022.
Auditors pointed out that one of the reasons why the government is allowing water districts to enter into joint venture agreements is to improve earnings, but San Jose Water District is doing the exact opposite.
Under Section 2.2 of the 2013 National Economic and Development Authority (NEDA) Guidelines for JVA’s between government and private entities, the arrangement is supposed to produce a product or provide a service supposed to be cost-efficient and geared “towards earning potential profits for the government” as well as the JVA partners.
The COA recommended that the general manager and the Board of Directors renegotiate with Primewater for an increase in San Jose Water’s share of revenue collections or to come up with additional provisions to address the drop in its net income without placing the burden on customers.
However, the management said the decrease was “expected” since the income from water consumption of concessionaires were turned over to its JV partner.
It said it cannot request for an increase of revenue share because Primewater will just increase the water rate and cause additional burden to customers.
“The way the management puts it is like saying that it is but normal for Primewater to earn P180 million annually while it is acceptable for the Government …to earn only P1 million to P4 million or even occasional losses of P5 million per annum,” the audit team said.
