OGCC Invalidates LWUA's Partial Takeover of MCWD in Cebu City

The Office of the Government Corporate Counsel (OGCC) invalidates the Local Water Utilities Administration's (LWUA) partial takeover of the Metropolitan Cebu Water District (MCWD). The OGCC opinion upholds MCWD's autonomy, citing LWUA's failure to follow due process and prove default on loan obligations.

author-image
Aqsa Younas Rana
New Update
OGCC Invalidates LWUA's Partial Takeover of MCWD in Cebu City

OGCC Invalidates LWUA's Partial Takeover of MCWD in Cebu City

The Metropolitan Cebu Water District (MCWD) board of directors has attained "peace" after the Office of the Government Corporate Counsel (OGCC) released a clarificatory opinion invalidating the Local Water Utilities Administration's (LWUA) partial takeover and appointment of an interim board of directors in Cebu City.

Why this matters: The resolution of this dispute has significant implications for the autonomy of local water districts and the role of government agencies in their operations. It also sets a precedent for resolving conflicts between government entities, ensuring that due process is upheld and that the interests oftakeover, valid stakeholders are protected.

The OGCC opinion, signed by Solomon Hermosura and Owen Vidad, stated that the LWUA's partial takeover is not valid due to the absence of default on the part of MCWD in the payment of its loan obligation with LWUA.

The OGCC also found that MCWD was not notified of any default and was not given the chance to correct it, violating due process. The LWUA's partial takeover was based on Resolution No. 35, which was not furnished to MCWD, and the water district was not in default in the payment of its loan. MCWD Chairman Joey Daluz III expressed relief, stating, "Now that's a peace time and we'll just savor that and go on with our work... It's just that the feeling that there will be no one who will interfere with us especially that the mayor now is Raymond and we have the OGCC opinion and I think our men and women in MCWD are very happy with this development."

The OGCC opinion was released on May 9, 2024, and was shared with the media on May 14, 2024. It clarifies a previous opinion issued on March 26, 2024, which was subject to contrasting interpretations by MCWD and LWUA. According to the OGCC, LWUA's partial takeover or intervention in MCWD is "not consistent" with the provisions of Presidential Decree 198. Specifically, the OGCC stated that the partial takeover or intervention is outside the purview of Sections 36 and 61(e) of PD No. 198.

The LWUA implemented a partial takeover of MCWD on March 15, 2024, and appointed an interim Board of Directors without prior notice to the water district. The Presidential Decree No. 242 mandates that conflicts or claims among government entities are to be resolved administratively by the Secretary of Justice, the Solicitor General, or the Government Corporate Counsel.

Jose Daluz III, MCWD chairman of the Board of Directors, expressed hope that LWUA will honor the latest OGCC opinion and no longer pursue the partial takeover it implemented on March 15, 2024. The OGCC's clarificatory opinion has upheld the autonomy of MCWD and invalidated LWUA's intervention in the water district's operations. The resolution of this dispute brings a sense of peace and allows MCWD to continue its work without interference.

Key Takeaways

  • MCWD board of directors regains autonomy after OGCC invalidates LWUA's partial takeover.
  • LWUA's takeover deemed invalid due to MCWD's timely loan payments and lack of default notice.
  • OGCC opinion upholds due process and protects stakeholders' interests.
  • Resolution sets precedent for resolving conflicts between government entities.
  • MCWD can now operate without interference, bringing a sense of "peace" to the organization.