Government to renegotiate MOC with Maynilad

The government is planning to renegotiate the terms of the memorandum of cooperation (MOC) signed by the Metropolitan Waterworks and Sewerage System (MWSS) and private concessionaire Maynilad Water Services Inc. (MWSI).

Economic Planning Secretary Dante Canlas said the MOC will have to be reviewed, and possibly renegotiated before any final deal is struck with MWSI. The MOC was signed June 8 to solve the financial problems of the water utility company.

"The memo of agreement could still be renegotiated to ensure that both the concerns of Maynilad as well as consumers opposing the planned water hike will be addressed," Canlas said.

Canlas said the government, while recognizing that MWSI has to recover its foreign exchange losses, also has to make sure that a "proper" adjustment is implemented and can be "absorbed" by consumers.

MWSI wants MWSS to approve its petition to increase its basic water rates by 72.16 percent to P4.75 per cubic meter by July to recoup its foreign exchange losses estimated at P2.5 billion in concession fees and P180 million concessionaire loans from Aug. 1 to Dec. 31, 2000.

The MOC allows MWSI to increase its basic rate a second time this year to recover within 18 months the losses it incurred due to recent foreign exchange fluctuations.

Canlas said, however, any plan for price adjustment should be reviewed and cleared with the Cabinet Cluster on Public Services and will have to be approved by President Arroyo.

Canlas said a review of the MOC as well as waterworks concessionaire granted to MWSI will have to reviewed to evaluate the impact of a higher water rate on consumers.

He said MWSI will definitely have its rate increase but admitted that if there is strong opposition for a water rate hike, government will have to look at other options.

MWSS said MWSI’s plan to hike its rates next month may have to be moved because the company has yet to submit documents to justify the increase. – Rocel Felix