La Union group slams court protection order in favor of PrimeWater

The group Water for the People Network La Union calls the court decision in San Fernando ‘unacceptable’ and a setback for consumers in the province

MANILA, Philippines – A consumer network in La Union on Wednesday, June 25, expressed dismay over a court ruling granting the Villar-owned PrimeWater Infrastructure Corporation a protection order, allowing the company to retain full control of water operations in San Fernando City and neighboring towns in the province.

In a statement, the Water for the People Network La Union called the Regional Trial Court (RTC) decision in San Fernando “unacceptable” and a setback for consumers in the province. The ruling was made on June 11, but the local water district received its copy on June 18.

The group cited what it described as PrimeWater’s “incompetence and failure” to meet its obligations under a 2016 joint venture agreement with the Metro San Fernando Water District (MSFWD), which covers San Fernando City and the towns of Bauang, Bacnotan, San Juan, and San Gabriel in La Union.

“The decision of the RTC San Fernando simply means the continued suffering under PrimeWater’s dismal service while consumers and residents are being milked dry for profit,” the group said.

PrimeWater-La Union said on Wednesday that it would continue to oversee the water supply in the MSFWD service area following the protection order, which it said made the earlier court decision to maintain the status quo “permanent.”

“This means PrimeWater remains in full control of the facilities and services under the JVA, and the MSFWD has been directed to cease efforts to take over the operations,” the company stated on its Facebook page.

MSFWD terminated the agreement on May 8 and assumed control of operations the following day, citing consumer complaints and alleged breaches of contract.

The board said it issued a notice of pretermination on January 2, giving PrimeWater 90 days to negotiate. It said the company failed to act within the period, even after being granted a 30-day extension.

On May 29, however, MSFWD announced it would suspend operations and ongoing water system rehabilitation projects after the court granted PrimeWater’s request for temporary relief. The suspension affected clearing operations, water line repairs, drilling of new sources, installation of transformers, and deployment of new chlorination systems.

“It is unfortunate that, despite PrimeWater’s obvious lack of capacity and continued inability to maintain MSFWD’s facilities and deliver reliable service, they insist on asserting control, thus preventing much-needed improvements and further delaying the quality service our consumers rightfully deserve,” the water district said.

“Rest assured, MSFWD remains committed to protecting the interest of the Public. We will exhaust all legal avenues to ensure that the people… are provided with the reliable, quality water service they are entitled to,” the office added.

‘JVA had to end’

MSFWD said the joint venture agreement “had to end,” citing what it called a decline in service since the company took over in 2016.

The office said PrimeWater failed to meet its commitment to increase daily water production to 28.3 million liters by 2021. While a revised target was allowed, actual output dropped from 11.7 million liters per day in 2016 to 9.64 MLD in 2024. The agency said the shortfall has resulted in weaker water pressure, reduced service hours, and widespread disruptions affecting thousands of residents.

MSFWD also criticized PrimeWater’s handling of non-revenue water (NRW), which refers to unbilled losses due to leaks, illegal connections, or faulty meters. NRW stood at 58% in 2016. Instead of improving, it rose to 64% by 2025, or more than double the 30% benchmark the company initially committed to meet.

An Asian Development Bank paper describes NRW as a key performance indicator for water utilities, with high levels pointing to weak management.

The JVA also included a target of round-the-clock water supply to all service areas by 2025. MSFWD said coverage has declined, from 54% of areas with 24/7 access in 2016 to just 18.48% in 2025.

PrimeWater also committed to increasing the number of active service connections to 15,800 by 2021 and 22,500 by 2024, as outlined in its 2021 catch-up plan. But MSFWD said current figures are below pre-2016 levels, when the company assumed operations. – Rappler.com