White flag? Why the Villars want out of PrimeWater

It appears that the Villar famly has just had enough of the brickbats and headaches arising from their PrimeWater business ventures.

Faced with criticisms from no less than President Ferdinand Marcos Jr. and PrimeWater customers affected by poor services, former senator Cynthia Villar said her husband, Manny, wants to give it up. 

In an ambush interview by select media on the sidelines of a local event in Las Piñas City on Thursday, July 31, the better half of one of the Philippines’ richest individuals said that not all the problems of local communities serviced by PrimeWater are due to management. 

“Ang PrimeWater, meron lang kaming mga sine-service na bayan, hindi lahat sine-service namin. And merong mga bayan na talagang may problema sa tubig, kahit na gawan natin ng…water system, problema, like ‘yung matataas [na lugar], San Jose del Monte, Bulacan, meron talagang problema,” she said. “So, hindi lahat ‘yan kasalanan ng nagpo-provide ng water.” 

(PrimeWater services a number of communities, not all. And there are some communities that really have water supply problems, that even if we built a water system, there’ still a problem, like if an area is high elevation, like San Jose del Monte, Bulacan, there’s really a problem. So, not all the problems are caused by the water provider.) 

And, based on a cost-benefit analysis, Villar said it’s turning out to be a bad investment decision on their part.

“’Saka hindi naman malaki ang binabayad sa amin diyan. In fact, gusto nga ni Manny Villar, i-dispose na ‘yang PrimeWater kasi ginagamit lang sa amin, panira sa amin; sa aming pulitika. Hindi naman kami kumikita nang malaki diyan,” the very quotable and frank Mrs. Villar said. 

(And we don’t get paid a lot for that. In fact, Manny Villar wants to dispose of it because it’s just being used against us; in our politics. We don’t earn so much from it.) 

It was during the campaign season when the problem of PrimeWater customers, initially in San Jose del Monte, was thrust into the national spotlight. This was after Rappler reporter Bonz Magsambol, who was covering an administration sortie attended by Camille in the Bulacan city, asked voters about problems in Bulacan they want candidates to address, and the overwhelming response was water supply and PrimeWater’s poor services.

Recall that their daughter, Camille, had a very poor showing in the midterm senatorial race where she placed 10th, and Cynthia herself had a painful loss in the lone congressional district elections for Las Piñas. 

Lack of investment

But that’s not what an investigation of PrimeWater’s joint venture agreements (and other firms) by the Local Water Utilities Association (LWUA) has come up with. It appears that the Villars did not really put the money needed to make it an efficient service while getting paid for a poor job. Public utilities require big capital expenditures, as the lessons of the privatization of Metro Manila’s east and west water zones in 1997 show, and it takes a long time to recover these investments.

In a post-State of the Nation Address (SONA) briefing on July 29 after the President again vowed to address poor water service in local communities, LWUA Administrator Jose “Joy” Salonga, without naming PrimeWater, said: “Ang usual problem na nakita namin is there was a lack of investment. Mayroon kasing kontrata iyan na dapat ito ang dapat nilagak na kapital, hindi nasunod iyon. With regards to mayroon bang technical capabilities, well, puwede nating sabihin na bago kasi nga ano naman but I don’t think they’re necessarily without experience kasi sanay naman mag-construct.” 

(The usual problem we saw is there was a lack of investment. There are contracts where this should have been the capital [invested], but that wasn’t followed. With regards to whether they had technical capabilities, well, we can say they’re new but I don’t think they’re necessarily without experience because they’re used to construction.)

The Villars are the biggest homebuilders in the Philippines.

He added that LWUA got a catch-up plan which, he said, “was actually an admission that there is fault,” and lamented that it has taken such a long time before a catch-up plan was drawn up. 

“And then, ano naman ang makukuha ng mga tao sa catch-up plan? Is it just another wait ‘di ba, ganoon ba? Maghihintay na lang tayo? Sino’ng may kasalanan nito? At admittedly, may pagkukulang iyong mga panahon na iyon pero hindi iyon ang excuse kung bakit tayo nandito ngayon. At saka, we’re here, hindi ba dapat ayusin na natin ngayon at the soonest possible time dahil napaka-inconvenient, 2025, wala kang maasahang tubig sa gripo ‘di ba, parang mali na iyon.“

(And then, what will the people get from the catch-up plan? Is it just another wait? Should we just wait? Who’s at fault here? And admittedly, there were shortcomings then but that’s not the excuse for why we’re in this situation now. And also, we’re here, shouldn’t we fix the problem at the soonest possible time because it’s so inconvenient, 2025, you [still] don’t expect water to come out of your faucets, isn’t that already wrong?)

Salonga also said the customers of the affected areas can’t be faulted since they were religiously paying for the water services. He estimated that around 6 million customers are affected by the poor services. 

“The President has heard, the President has read. Hindi exaggeration iyong dalawang balikbayan boxes na pinadala namin sa opisina niya, worth of documents and complaints. Hindi rin joke iyon or trolling ang natatanggap naming reklamo, araw-araw mayroon kaming natatanggap diyan! Kung mayroong telepono, mas marami pa sa social media, so maraming apektado,” he said.

(The President has heard, the President has read. It’s not an exaggeration, the two balikbayan boxes worth of documents and complaints that we sent to his office. It’s also not a joke, the trolling that we receive [from complaining customers], every day we get complaints. From the telephone and more from social media, so there are a lot affected.)

The Marcos administration has also reiterated that those responsible for the mess should be held accountable. 

As Presidential Communications Undersecretary Claire Castro said in the same post-SONA briefing: “Titiyakin ng LWUA na mailalagay na sa ayos ang serbisyo ng tubig ng milyon-milyon nating mga kababayan at gawing mas abot-kaya naman ang presyo. Higit sa lahat, titiyakin nating mapapanagot ang mga nagpabaya at nagkulang sa mahalagang serbisyo-publiko na ito.”

(LWUA will make sure that it will fix the service of millions of our countrymen and to make the price affordable. And most of all, make sure to hold accountable those who neglected and fell short of good public service.) 

In a statement on July 9, PrimeWater said a total of 75 joint venture agreements with local water districts were executed from 2013 to 2022. 

“All Agreements were processed in accordance with the National Economic and Development Authority (NEDA) guidelines and were approved by the respective local Water Districts as the implementing government entities, with the review and clearance of the Office of the Government Corporate Counsel (OGCC). The Department of Public Works and Highways (DPWH) is not part of the approving process,” the company said.

Senator Mark Villar, who was the DPWH secretary when many of the joint venture agreements were signed, has also said that he “did not participate in any capacity whatsoever in any transactions or potential transactions between PrimeWater and any of its partner districts.” He also said he has no direct or indirect ownership or interest in PrimeWater. 

The lesson from the PrimeWater controversy is that while privatization may be good in many cases, there are exceptions to the rule. And the key is for government to scrutinize the entities that want to enter into partnerships with the public sector.

Such contracts should be awarded to enterprises that have a proven track record of good service, and should be bid out in a transparent way, with communities having a say in the whole process, including opting out if they get a bad deal. And, perhaps, award it to those who are in it not just for the bottomline. – Rappler.com