Water rate hike this month deferred

The anticipated increase in water rates this month has been suspended, but it is likely to push through next month.

This, as Manila Water Co. Inc. said yesterday that water rate hikes would have to wait until February as they look forward to the decision of the Metropolitan Waterworks and Sewerage System (MWSS) for the possible granting of extension of its contracts with water concessionaries.

Manila Water was originally set to start this January its new rate adjustment based on the firm’s approved business plan for 2008 to 2012.

According to Manila Water, the MWSS approved in December 2007 its plans to further expand water and sewerage services and increase reliability of water supply for the East Zone after undergoing a thorough rate determination process. The approved rates took effect in 2008 but were staggered over a five-year period until 2012.

“An extension of the contract will have a positive impact particularly in helping the economy because of the increase in capital expenditure (capex). We are aware of the global financial crisis and Manila Water can greatly contribute with our programmed P7-billion annual capital investment program,” said Tony Aquino, president of Manila Water.

“A total of P187 billion has been earmarked to fund Manila Water’s capex programs until 2022. These service improvement projects will also create opportunities for budding entrepreneurs that will help the company in implementing various projects,” he said.

Jeric Sevilla, of Manila Water’s corporate communications department, likewise said that extending the contract of the firm by another 10 years would cut their planned rate increase of P20 to just around P6 or so per cubic meter.

Meanwhile, aside from awaiting the decision of the MWSS on the possible extension of concession contracts, Maynilad Water Services Inc., which covers the West Zone, is also awaiting the approval of its business plan after undergoing its own rate rebasing exercise last year.

Recently, Socioeconomic Planning Secretary Ralph Recto recommended to the Cabinet an extension of Manila Water and Maynilad’s concession contracts.

Recto said that huge capital expenditures of both water and wastewater service providers will contribute to pump prime the economy and spur greater private sector investments that will create more jobs.