The Mandaue City Government has signed a compromise agreement with Asian Energy Systems Corp. to resolve a lawsuit over unpaid garbage disposal fees totaling P9.3 million. City Administrator Gonzalo “Sally” Malig-on Jr. confirmed that Mayor Thadeo Jovito “Jonkie” Ouano signed the agreement, which is now pending court approval. Once approved, the city expects to resume direct waste disposal at the company’s Consolacion facility, ending its reliance on third-party hauling contractors that have driven annual costs to over P200 million.
Background of the Legal Dispute
Asian Energy Systems Corp. filed the lawsuit during the previous administration after Mandaue City failed to pay garbage disposal fees for using the company’s sanitary landfill. The legal action prevented the city from directly disposing of its waste at the facility, forcing it to hire third-party contractors for transport and disposal. Malig-on stated that the compromise agreement must first be approved by the court and then reviewed by the Commission on Audit before any payment is made.
Financial Impact of Third-Party Hauling
Under the previous direct disposal arrangement, the city spent approximately P60 million to P70 million annually on landfill tipping fees. However, the shift to third-party hauling, combined with limited access to other disposal sites like the Binaliw landfill in Cebu City, increased annual solid waste management costs to more than P200 million. Malig-on emphasized that the city expects to significantly reduce expenses once direct disposal resumes.
Next Steps and Procurement Process
Until the compromise agreement receives court approval, Mandaue will continue using third-party hauling contractors. After the settlement is finalized, the city will conduct a procurement process in accordance with government regulations to award a waste disposal contract. If Asian Energy wins the bidding, Malig-on said the city plans to restore direct hauling from barangays to the Consolacion facility, bypassing intermediate transfer stations. This change is expected to reduce hauling time and fuel costs for garbage collection operations.
