By Madelaine B. Miraflor
Manila Water Company, Inc. (MWC) and Maynilad Water Services Inc. (Maynilad) will now have to go through a regular stricter financial audit, which will be conducted by the Metropolitan Waterworks and Sewerage System (MWSS) every year instead of only once in five years.
A statement showed that to more efficiently monitor the water concessionaires’ compliance with the Concession Agreement and the delivery of their service obligations, the MWSS Regulatory Office (RO) has already initiated a yearly conduct of its Regulatory Financial Audit (RFA) on the two concessionaires.
It was in March when the MWSS first revealed the plan to do the RFA, but it faced delay because of some bureaucratic setbacks like securing funds for the said activity and selecting the auditing firm who will conduct the audit.
The RFA was previously performed every five years through the rate rebasing, which is a review of the water utilities’ past performance and projection of their future cash flows.
Its purpose is to set the water rates at a level that would allow both Maynilad and Manila Water to recover their expenditures and earn a rate of return.
MWSS Chief Regulator Patrick Ty said MWSS RO has recently acquired the services of Constantino and Partners (CP) to conduct the RFA on the books and records of the concessionaires for the period 01 July 2017 to 31 December 2018.
CP is an auditing firm accredited by the Philippine Securities and Exchange Commission, Philippine Board of Accountancy, Bangko Sentral ng Pilipinas, Insurance Commission of the Philippines, and the Philippine Bureau of Internal Revenue.
The 2019 RFA officially commenced on Wednesday, while a detailed Audit Report is expected to be delivered by the first quarter of the year 2020, Ty further said.
Meanwhile on an unrelated topic, the MWSS Board of Directors will soon decide on the fate of the Wawa Dam project of port magnate Enrique Razon, the only new water source expected to come online within this administration.
An official at MWSS said that the MWSS Board might soon take up the Wawa Dam project, which will have an initial capacity to treat 80 million liters of water per day (MLD) and is among the new water sources eyed for Manila in the medium term.
The next MWSS Board meeting is scheduled next Thursday, November 14.
The MWSS official said this after WawaJVCo — the joint venture between Razon’s Prime Infra and businessman Oscar Violago’s San Lorenzo Ruiz Builders Group — said “the development work to ensure water supply delivery of 80 MLD in 2021 and over 500 MLD in 2025 that will address the on-going water crisis in Metro Manila may not push through as planned.”