MWSS rejects water rate hike

MANILA, Philippines - Average basic water rates will go down starting next month as the Metropolitan Waterworks and Sewerage System (MWSS) Regulatory Office denied the petitions filed by Manila Water Co. Inc. and Maynilad Water Services Inc. to hike rates.

In a press conference yesterday, MWSS acting chief regulator Emmanuel Caparas said the board has approved a 29.47 percent downward adjustment on Manila Water’s 2012 average basic water charge of P24.57 per cubic meter, which will be implemented in five equal tranches of  -5.894 percent per charging year.

This means that for residential customers with consumption of 10 cubic meters, the monthly water bill will be reduced to P123.04 by October from P134.77 previously. Those with consumption of 20 cubic meters will see a lower monthly bill of P271.13 from P297.12 and those who consume 30 cubic meters will pay a monthly water bill of P552.04 from the previous P605.10.

Manila Water proposed a basic rate increase of P5.83 per cubic meter.

Manila Water provides water and wastewater services for the East Zone of the metropolis, which covers Makati, Mandaluyong, Pasig, Pateros, San Juan, Taguig, Marikina, and most parts of Manila and Quezon City, as well as Rizal.

Caparas said the MWSS board has likewise approved a negative adjustment of 4.82 percent on Maynilad’s 2012 average basic water charge of P30.28 per cubic meter, which will be implemented in five equal tranches of -0.964 per charging year.

For consumers with consumption of 10 cubic meters or less, the approved downward adjustment translates to a lower monthly water bill of P90.92 by October from P105.22. Meanwhile, for consumers with consumption of 20 cubic meters, the monthly water bill will be reduced to P339.62 from P369.76 and those who consume 30 cubic meters will pay a decreased monthly bill of P692.76 from P739.79 previously.

Maynilad requested for an P8.58 per cubic meter rate hike for 2013 to 2018.

Maynilad serves the cities of Manila (all but 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 Piñas, 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.

The two companies proposed to hike rates as part of their business and investment plans submitted to the MWSS earlier this year.

Caparas said the MWSS decided to approve downward adjustment in water rates as the two firms were unable to justify the need for higher rates based on their business and investment plans. “Substantial disallowances were effected for unsubstantiated expenses, unliquidated cash advances, infrastructure projects, unjustified variation orders, capitalized interest, among others,” he said.

“There was no pressure from any party with the approval of the rates,” he said.

He added that the reductions are seen to be beneficial for the public.

While the MWSS has approved downward adjustments, he said the water concessionaires can still file an appeal on the decision as the concession agreements allow for an arbitration process.

“We are open to compromise but it has to be reasonably fair,” he said.

He said that during the entire rebasing process, the MWSS Regulatory Office adhered to the Concession Agreement and followed the law. 

“We engaged the concessionaires in hundreds of hours of discussions and evaluation of their documents,” Caparas said, adding that they consulted the public as well as private sector groups.

Manila Water said in a disclosure to the Philippine Stock Exchange yesterday that it objects to the rate adjustments and that it intends to avail of the dispute resolution mechanism as provided in the concession agreement.

Manila Water corporate communications head Jeric Sevilla told reporters the water firm will file the intent to proceed with arbitration in two weeks. – With Rhodina Villanueva