MWSS may freeze pending rate increase

By Madelaine B. Miraflor

Metropolitan Waterworks and Sewerage System (MWSS) is considering suspending the implementation of Manila Water Company, Inc.’s pending rate increase under the fourth rate rebasing.

Metropolitan Waterways and Sewerage System (MWSS) logo MWSS Logo

MWSS Board of Trustees has unanimously adopted Resolution No. 2019-052, directing the MWSS Regulatory Office (MWSS RO) to study the imposition of penalties on Manila Water and suspension of increase in water rates following the water shortage that affected consumers in the east zone concession area this month.

Under the fourth rate rebasing — a review of the water utilities’ past performance and projection of their future cash flows — Manila Water would be allowed to implement a rate increase of about P6.22 to P6.55 per cubic meter (cu.m) to be implemented in tranches over the next four years.

The rate rebasing is done every five years and is supposed to set the water rates at a level that would allow both Manila Water and Maynilad Water Services, Inc. to recover their expenditures and earn a rate of return.

The resolution, signed by MWSS Chairman Franklin Demonteverde and MWSS Administrator Reynaldo Velasco, specifically ordered MWSS RO to “assess the propriety of the suspension of the increase in rates” in the Manila Water concession areas because of service interruptions experienced in their coverage areas.

MWSS RO is expected to come up with “factual and legal basis for such proposals.”

Manila Water may have violated its obligation to provide uninterrupted water services to its customers as contained in Article 10.4 of its concession agreement with the government.

MWSS Chief Regulator Patrick Ty said Manila Water was given until next week to explain why the government should not penalize it based on their concession agreement.

“They were given notice to explain. After that, we will proceed to study how much or if there is violation. Then we will decide a corresponding action,” Ty earlier said.

“The set up would be is we can’t impose fines, we can just impose rebate because that is part of the penalties based on their concession agreement . Another option is the cancellation of concession agreement,” he added.

On Tuesday, Manila Water Company, Inc. said it is voluntarily waiving the fees for its customers, but MWSS made it clear that it is not enough for the Ayala-led company to make up for the unprecedented water supply interruption it implemented in the past weeks.