MWSS to review capex of concessionaires

MANILA, Philippines – The Metropolitan Waterworks and Sewerage System (MWSS) has assured the public that it will properly review the planned capital expenditures of water concessionaires in Metro Manila to make sure that new water rates that will be implemented in the next five years will not be burdensome to consumers.

Water concessionaires Manila Water Co. Inc. (East Zone) and Maynilad Water Services Inc. (West Zone) have submitted to the MWSS their five-year business plans for rate rebasing for the period 2013 to 2017.

“Right now, it is still too early to say if water rates for next year will go up or down but we will make sure to check that the capex of the concessionaires are properly audited,” said MWSS administrator Gerry Esquivel in an interview. “But surely, we will be on the side of consumers.”

New water rates are expected to be known by January. Discussions between the water firms and the regulatory body are currently taking place.

Every five years, water concessionaires in Metro Manila file their business plans for approval of the MWSS. These plans contain the tariff rates imposed on customers as well as service and investment.

Also to be considered, however, are current inflation levels; foreign exchange adjustments that will affect the companies’ outstanding foreign-denominated obligations; and extraordinary price adjustments that are applicable during the enactment of a law that will affect the firms’ cash flow or force majeure that will result to additional expenditures that are not covered by insurance. 

This year, both concessionaires are aggressively expanding their service network to tap areas that were previously serviced by private water deliveries, which are oftentimes more expensive for consumers.

Maynilad is particularly expanding its reach and improving existing service lines in Caloocan and Cavite.

Manila Water, on the other hand, is heavily investing in wastewater treatment facilities in Taguig and Marikina. It has also recently inaugurated its upgraded metrology center in Quezon City.

Manila Water provides water and wastewater services to the following areas: Mandaluyong, Pasig, San Juan, Marikina, Pateros, Taguig, Makati, southeastern part of Quezon City, San Andres and Sta. Ana in Manila, as well as several towns of Rizal province including San Mateo, Rodriguez, Antipolo, Cainta, Angono, Baras, Binangonan and Jalajala.

Maynilad, on the other hand, covers Manila except portions of San Andres and Sta Ana, Quezon City (west of San Juan River, West Avenue, EDSA, Congressional, Mindanao Avenue, the northern part starting from the districts of the Holy Spirit and Batasan Hills), Makati (west of South Super Highway), Caloocan, Pasay, Parañaque, Las Pinas, Muntinlupa, Valenzuela, Navotas and Malabon all in Metro Manila; the cities of Cavite, Bacoor and Imus, and the towns of Kawit, Noveleta and Rosario, all in Cavite Province.

Rate increases for water services are influenced by its allotted capital expenditure in proportion to its net income.