No improvement after 5 years of MWSS privatization — solon

Five years after the Metropolitan Waterworks and Sewerage System (MWSS) was privatized, consumers are worse off than ever, with water rates shooting up as high as 125 percent since September 2001, according to Akbayan party-list Rep. Loretta Ann Rosales.

In fact, Rosales said, the Lopez-owned Maynilad, which controls the western sector, has just applied for a new schedule pegging water rates at P30 per cubic meter, or another 94 percent increase.

She called for urgent reforms, saying government should put in place an independent body that would regulate the water utility sector. She also said government should look for another concessionaire to replace Maynilad, which had been saddled with financial woes.

"The government’s water privatization program has clearly failed to achieve its goal of a more efficient service at lower costs," Rosales told a news conference.

In 1997, government granted Maynilad and the Ayala-owned Manila Water Co. franchises to operate a water distribution service in Metro Manila. The 1997 agreement also created the MWSS Regulatory Office (RO), the body tasked to see to it that the water firms keep to their obligations under the contract.

The RO, however, has been snagged by a series of controversies, with some officials charging that Maynilad has won concessions from the government at the expense of the public. The Lopez-owned firm managed to win a new memorandum of agreement with MWSS allowing them unbridled rates increases, according to Rosales.

To justify the new rates, Maynilad said it had to recoup losses it suffered because of the 1997 financial crisis that hit the Asian region. But Akbayan charged that Maynilad itself is to blame for the losses, accusing the firm of gross mismanagement and inefficiency.

Two officials at the RO who have opposed Maynilad’s petitions for water rates increases have been terminated. The two officials, lawyer Elena Alojipan, who headed the financial accounting department, and Virgilio Ocaya, who headed the legal and administrative department, have filed a suit in court questioning the termination.

"The agreement virtually amended the terms of the original contract," said Rosales.

Since Oct. 21, when the amendments were approved, Maynilad has implemented three rounds of increases. From P6.58 per cubic meter of water in September 2001, the water rate charged by Maynilad has jumped to P15.46 per cubic meter.

"That means that Maynilad water rates per cubic meter have increased by 135 percent since the contract amendments," Rosales said. "If we go even further back to pre-privatization rates, then Maynilad water rates have increased by a staggering 211 percent in the last five years."

In 1997, consumers in the sector now serviced by Maynilad only paid a water tariff rate of P4.96 per cubic meter. Rosales said she has recently gathered that Maynilad has applied for a new round of rate adjustments that would allow it to charge a basic water tariff at P30 per cubic meter — or another 94 percent increase.

If approved, the new rates would take effect in January next year.

Rosales said the RO itself and the MWSS board, which is supposed to oversee the operations of the water utilities, have been plagued with charges of corruption. She said the RO processes for evaluating price increase petitions were clear-cut in the original contract, but these were sabotaged by then chief regulator Rex Tantiongco, who has since retired from the post.

Tantiongco, she said, himself lobbied for the amendments to the contract. "The regulators who dared to do their jobs were fired," she said.