Akbayan charges water firms with rate irregularities

Sectoral representative and militant group Akbayan said yesterday that there are gross irregularities in the proposed water rate hike of Maynilad Water Services and Manila Water. Metropolitan Waterworks and Sewerage System.

Rep. Etta Rosales of Akbayan said that Maynilad and Manila Water’s pressing for a price increase clearly violates the contract they entered into when they assumed ownership of the Metropolitan Waterworks and Sewerage System.

Rosales said that although the two water concessionaires are allowed to jack-up their water rates, it should be done gradually, and they should not recoup their losses with a one-year program through the Automatic Currency Rate Adjustment scheme.

"Maynilad especially, wants to recover about P3 billion in financial losses in one year, when their contract clearly states that it should be 22 years before they should regain such losses," Rosales told newsmen in a press conference.

According to Jude Esguerra, of the Institute for Popular Democracy, the 54 percent price increase that Maynilad wants is highly irregular because it was done outside the framework of the contract with MWSS.

Esguerra said that the Arroyo administration should oversee the concessionaire’s compliance with the contract and evaluate petitions for price increases through the MWSS Regulatory Office.

He added that the Chief Regulator Rex Tantiangco acts as advocate for the concessionaires’ demands instead of policing their performance.

‘The actual fact is that MWSS is about to be bankrupt in July because Maynilad has repeatedly failed to pay its financial obligations to them. Both are in need of cash, but if we let them resort to what they propose, then consumers will have a tough time paying P7 per cubic meter in the price of water in the Maynilad area," Esguerra told The Star in a telephone interview.

Manila Water is actually entitled to a five percent Appropriate Discount Rate in the contract but now the water concessionaire wants an ADR of 18 percent of which 9.3 percent was already approved.

Akbayan said that they will challenge the legality of the proposed water rate hikes and will also file a petition for a formal investigation of the irregularities within the Regulatory Office and the MWSS Board of Trustees.

According to Jess Matubis, Maynilad’s manager of corporate affairs, they are still waiting for the government’s decision on what to do about their pleas for help with their financial status.

"We’re keeping quiet and simply waiting for what will be the government’s proposal. We are in dire financial straits and we badly need an increase in our prices if we want Maynilad to continue as a water agency," Matubis said in an interview. — Matthew Estabillo