MANILA, Philippines — A consumer group filed a graft and corruption complaint against former and current Metropolitan Waterworks and Sewerage System (MWSS) officials before the Office of the Ombudsman on Friday over the P12-billion Kaliwa Dam Project in Rizal province.

Named respondents by the United Filipino Consumer and Commuters-Water for All Refund Movement (UFCC-WARM) were incumbent MWSS Administrator Leonor Cleofas and predecessor Reynaldo Velasco.

The complaint stemmed from the release of advance payments to the foreign contractor of the Kaliwa Dam project, China Energy Engineering Corporation (CEEC), amounting to P1.828 billion and the P309.840 million standby costs.

Rodolfo Javellana Jr., UFCC-WARM national president, said in the complaint that the "improper and rushed entry into the Kaliwa Dam Project contract with CEEC, and the approval of "numerous questionable transactions emanating therefrom, directly resulted in the incursion of unconscionable standby costs" that Filipinos and water consumers are already paying under rate rebasing in 2023 "even if there is still no water being utilized from Kaliwa Dam."

Standby cost, as defined, is the penalty or payment made by MWSS to contractors whenever a project stalls due to negligence, fault or deficiency of the agency.

Used as one of the primary evidence in the complaint was the letter that Javellana received from the Commission on Audit (CoA) informing him that a team assigned at the MWSS issued Audit Observation Memorandum containing the findings relating to the Kaliwa Dam Project, which were included in the published Annual Audit Reports (AARs) for calendar years 2020, 2021 and 2022.

The CoA informed Javellana that the same audit team issued two Notices of Disallowance relating to the advance payments and on payments of standby costs and other costs made to the CECC.

In its 2009 Revised Rules of Procedure, the CoA defines disallowance as "the disapproval in the audit of a transaction, either in whole or in part."

Essentially, when a government transaction is disallowed, as it is irregular, unnecessary, excessive, extravagant or illegal, the public funds used for it must be returned to the government by the people who approved it.

In the same letter sent to Javellana, the CoA said the audit team also conducted an initial evaluation of an anonymous complaint regarding the alleged irregularities in the construction of the Kaliwa Dam Project, which was referred to the Fraud Audit Office, Special Services Sector of CoA.

"For 2024, the Special Audits Office, Special Services Sector, CoA is presently conducting the Regulatory Financial Audit of the MWSS Concessionaires – Manila Water Company, Inc. (MWCI) and Maynilad Water Services, Inc. (MWSI), in line with the mandated function of CoA to examine and audit the books, records and accounts of public utilities in connection with the fixing of rates of every nature pursuant to Section 38(1) of PD 1445," said CoA's Office of the Director of Cluster 3-Public Utilities of the Corporate Government Audit Sector.

The Kaliwa Dam Project or the New Centennial Water Supply Project is a new water source to be constructed to meet the increasing demand of the people of Metro Manila, and the provinces of Rizal and Quezon.