Manila Water, Maynilad seek higher water rates anew

Published December 6, 2019, 4:07 PM

by AJ Siytangco

By  Madelaine Miraflor

Notwithstanding the threat of President Duterte to sue them for economic sabotage, the Manila Water Company, Inc. and Maynilad Water Services, Inc. are seeking government approval for another water rate increase to be implemented in the first quarter of 2020.

(MANILA BULLETIN)
(MANILA BULLETIN)

In a text exchange, Metropolitan Waterworks and Sewerage System (MWSS) Chief Regulator Patrick Ty said that both concessionaires have already applied for their quarterly Foreign Currency Differential Adjustment (FCDA).

“It would be an upward adjustment if approved,” Ty said.

President Duterte had earlier threatened to jail and sue the persons involved in the alleged onerous water concession agreement for economic sabotage, saying they were screwing the Filipino people and milking billions from the government. Among the people to be held accountable are the two water companies’ owners and lawyers as well as government agents and lawyers involved in the deals.

The President issued the threat after the Permanent Court of Arbitration in Singapore directed recently the Philippine government to pay Manila Water P7.39 billion for the non-implementation of water rate increases. Manila Water explained it sought arbitration after the Philippine government breached the agreement that the company would be allowed have water price hikes.

Duterte, however, declared that he would pay Manila Water for its supposed losses, insisting that the concession agreement had onerous provisions.

In 2017, the arbitration court had also ordered the government to pay Maynilad P3.4 billion for the same reason.

Tariff mechanism

The FCDA being sought is a tariff mechanism that allows Maynilad and Manila Water to recover or compensate for fluctuations in foreign exchange rates. The two concessionaires apply for FCDA, which is approved every quarter, as they have to pay foreign-dominated concession fees to MWSS, as well as dollar-denominated loans, which they used to fund their projects.

If companies are seeking for an upward FCDA, it means higher water rates for their customers for the next three months.

Ty said that he will present the latest FCDA application of Maynilad and Manila Water to the MWSS Board of Directors in their regular board meeting on December 13.

The last FCDA adjustment took effect on October 1. It allowed Manila Water to implement FCDA of 2.43 percent of its Average Basic Charge of P28.52 per cubic meter or P0.69 per cubic meter, which is an upward adjustment of P0.17 per cubic meter compared to the firm’s third quarter FCDA.

The impact of this adjustment to Manila Water customers consuming 10 cubic meters or less – except for lifeline customers who are exempted to the quarterly FCDA charges – was an increase of P0.93 in the monthly billing.

Those consuming 20 cubic meters per month and 30 cubic meters per month, on the other hand, have to pay additional P2.06 and P4.20 respectively.

Meanwhile, Maynilad now implements an FCDA of negative 0.35 percent of its 2019 Average Basic Charge of P36.24 per cubic meter or negative P0.13 per cubic meter. This translates to an upward adjustment of P0.02 per cubic meter compared to the firm’s third quarter FCDA.

This pushed higher the monthly bills of Maynilad customers consuming 10 cubic meters or less by P0.09, while those consuming 20 cubic meters per month and 30 cubic meters per month will have to pay P0.34 and P0.70, respectively.

The latest increase in the FCDA followed the deferment of the implementation of the third quarter FCDA, which was decided upon as MWSS transitioned into a new leadership.

Maynilad is the largest private water concessionaire in the Philippines in terms of customer base. It is the agent and contractor of the MWSS for the West Zone of the Greater Manila Area, which is composed of the cities of Manila (certain portions), Quezon City (certain portions), 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.

Manila Water, on the other hand, provides water and wastewater services primarily to the East Zone concession area covering the cities of Makati, Mandaluyong, Pasig, Pateros, San Juan, Taguig and Marikina. It is also in charge for the southeastern parts of Quezon City and Sta. Ana and San Andres in Manila. In Rizal province, the Manila Water services the municipalities of San Mateo, Rodriguez, Cainta, Taytay, Angono, Baras, Binangonan, Jala-Jala, as well as the City of Antipolo.

OSG to challenge ruling

Meanwhile, the Office of the Solicitor General (OSG) assured that it will contest the recent decision of the Singapore-based arbitration court.

“We will not let this prevail without a fight,” said Solicitor General Jose Calida in a statement.

Calida said that the OSG will “exhaust all available legal remedies against the award.”

“While the OSG respects its obligation to keep confidential the arbitration proceedings, the OSG cannot just simply stand by and watch Manila Water spin the circumstances and paint itself as an exemplary, outstanding company,” he stated.

“This arbitration proceeding tells a very different story, one which will naturally reveal itself through the next actions we will undertake. Our next steps will show that the arbitral award was not, to quote Manila Water, due to a ‘procedural lapse’ by government. It is a company’s refusal to become the subject of a legitimate regulation,” he explained.

Calida added that Manila Water also shouldn’t boast about its billions of pesos worth of infrastructure. He argued that “if indeed billions went to investing in water infrastructure, then why is the public suffering from one of Manila’s worst water shortages for the past year?” (With reports from Genalyn D. Kabiling and Jeffrey G. Damicog)

READ MORE: Solgen vows to contest P7.39-billion arbitration award to Manila Water

 
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Manila Water, Maynilad seek higher water rates anew

Published December 6, 2019, 12:00 AM

by manilabulletin_admin

By  Madelaine Miraflor

Notwithstanding the threat of President Duterte to sue them for economic sabotage, the Manila Water Company, Inc. and Maynilad Water Services, Inc. are seeking government approval for another water rate increase to be implemented in the first quarter of 2020.

(MANILA BULLETIN)
(MANILA BULLETIN)

In a text exchange, Metropolitan Waterworks and Sewerage System (MWSS) Chief Regulator Patrick Ty said that both concessionaires have already applied for their quarterly Foreign Currency Differential Adjustment (FCDA).

“It would be an upward adjustment if approved,” Ty said.

President Duterte had earlier threatened to jail and sue the persons involved in the alleged onerous water concession agreement for economic sabotage, saying they were screwing the Filipino people and milking billions from the government. Among the people to be held accountable are the two water companies’ owners and lawyers as well as government agents and lawyers involved in the deals.

The President issued the threat after the Permanent Court of Arbitration in Singapore directed recently the Philippine government to pay Manila Water P7.39 billion for the non-implementation of water rate increases. Manila Water explained it sought arbitration after the Philippine government breached the agreement that the company would be allowed have water price hikes.

Duterte, however, declared that he would pay Manila Water for its supposed losses, insisting that the concession agreement had onerous provisions.

In 2017, the arbitration court had also ordered the government to pay Maynilad P3.4 billion for the same reason.

Tariff mechanism

The FCDA being sought is a tariff mechanism that allows Maynilad and Manila Water to recover or compensate for fluctuations in foreign exchange rates. The two concessionaires apply for FCDA, which is approved every quarter, as they have to pay foreign-dominated concession fees to MWSS, as well as dollar-denominated loans, which they used to fund their projects.

If companies are seeking for an upward FCDA, it means higher water rates for their customers for the next three months.

Ty said that he will present the latest FCDA application of Maynilad and Manila Water to the MWSS Board of Directors in their regular board meeting on December 13.

The last FCDA adjustment took effect on October 1. It allowed Manila Water to implement FCDA of 2.43 percent of its Average Basic Charge of P28.52 per cubic meter or P0.69 per cubic meter, which is an upward adjustment of P0.17 per cubic meter compared to the firm’s third quarter FCDA.

The impact of this adjustment to Manila Water customers consuming 10 cubic meters or less – except for lifeline customers who are exempted to the quarterly FCDA charges – was an increase of P0.93 in the monthly billing.

Those consuming 20 cubic meters per month and 30 cubic meters per month, on the other hand, have to pay additional P2.06 and P4.20 respectively.

Meanwhile, Maynilad now implements an FCDA of negative 0.35 percent of its 2019 Average Basic Charge of P36.24 per cubic meter or negative P0.13 per cubic meter. This translates to an upward adjustment of P0.02 per cubic meter compared to the firm’s third quarter FCDA.

This pushed higher the monthly bills of Maynilad customers consuming 10 cubic meters or less by P0.09, while those consuming 20 cubic meters per month and 30 cubic meters per month will have to pay P0.34 and P0.70, respectively.

The latest increase in the FCDA followed the deferment of the implementation of the third quarter FCDA, which was decided upon as MWSS transitioned into a new leadership.

Maynilad is the largest private water concessionaire in the Philippines in terms of customer base. It is the agent and contractor of the MWSS for the West Zone of the Greater Manila Area, which is composed of the cities of Manila (certain portions), Quezon City (certain portions), 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.

Manila Water, on the other hand, provides water and wastewater services primarily to the East Zone concession area covering the cities of Makati, Mandaluyong, Pasig, Pateros, San Juan, Taguig and Marikina. It is also in charge for the southeastern parts of Quezon City and Sta. Ana and San Andres in Manila. In Rizal province, the Manila Water services the municipalities of San Mateo, Rodriguez, Cainta, Taytay, Angono, Baras, Binangonan, Jala-Jala, as well as the City of Antipolo.

OSG to challenge ruling

Meanwhile, the Office of the Solicitor General (OSG) assured that it will contest the recent decision of the Singapore-based arbitration court.

“We will not let this prevail without a fight,” said Solicitor General Jose Calida in a statement.

Calida said that the OSG will “exhaust all available legal remedies against the award.”

“While the OSG respects its obligation to keep confidential the arbitration proceedings, the OSG cannot just simply stand by and watch Manila Water spin the circumstances and paint itself as an exemplary, outstanding company,” he stated.

“This arbitration proceeding tells a very different story, one which will naturally reveal itself through the next actions we will undertake. Our next steps will show that the arbitral award was not, to quote Manila Water, due to a ‘procedural lapse’ by government. It is a company’s refusal to become the subject of a legitimate regulation,” he explained.

Calida added that Manila Water also shouldn’t boast about its billions of pesos worth of infrastructure. He argued that “if indeed billions went to investing in water infrastructure, then why is the public suffering from one of Manila’s worst water shortages for the past year?” (With reports from Genalyn D. Kabiling and Jeffrey G. Damicog)

READ MORE: Solgen vows to contest P7.39-billion arbitration award to Manila Water

 
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