Consider new circumstances in water concession review

Published December 22, 2019, 12:00 AM

by manilabulletin_admin

By Myrna M. Velasco

The review of the concession agreement on the distribution of water supply in the country should consider the two-decade changes as well as the new circumstances that are now afflicting the state of water supply in the country.

That has been the opinion raised by former Metropolitan Waterworks and Sewerage System (MWSS) Administrator Angel Lazaro whose time at the water agency concretized the original 25-year concession deal with Manila Water Co., Inc. and Maynilad Water Services, Inc.

He noted that since the government through MWSS and the concessionaire-firms already agreed on a review of the contract, “it is actually for the best interest of everybody to look at it (concession agreement) again.”

Lazaro said when the concession contracts were sealed in 1996, the circumstances in the country’s state of water supply then were completely different if compared with the present.

Back then, Lazaro emphasized that service coverage of water supply in Metro Manila and nearby provinces served by MWSS were just at 63 percent and availability was just for 15 hours a day; while non-revenue water had been at a staggering 50 percent.

Fast forward to 2019, the former MWSS chief indicated that service coverage had already expanded to roughly 100 percent and water availability had improved to 24 hours. In addition, non-revenue water and leakage had also been considerably pared to 10 percent.

Lazaro emphasized that tapping private concessionaire-firms had been the only recourse back in 1996, hence, the agreement that the government had entered into with Manila Water and Maynilad.

But with the passing of time, he admitted that like in many agreements or contracts, the concession deal had skidded into its “obsolescing bargain” frame, hence, the raging allegations thrown against them now that their contracts had been onerous.

Lazaro, nevertheless, explained that the entry of the concessionaires then had been underpinned by the provisions of Republic Act 8041 or the National Water Crisis Act of 1995 that warranted the privatization of the MWSS through concession arrangements for water distribution to consumers.

He further indicated that the dilemma on water supply right now is on the sourcing aspect of it – and not exactly the distribution system which is the function vested upon the concessionaires.

Lazaro said even if Manila Water and Maynilad had already expanded and reinforced their water distribution networks – if there would be no water to distribute, then there is not really much that they can do about improving overall service to end-users.

He said it is the job of the government or the MWSS to look for water source, and that had been the part where the entire water supply chain had failed at in the past years.

“The water concessionaires have their hands tied because proposals on development of new water supply sources had not been approved by the government,” Lazaro stressed.

He similarly pointed out that the rate hikes as well as the cost recoveries made by the water concession-firms had been carried out only with the approval of the regulatory office of the MWSS.

“The concessionaires do not have the power to set rates or to set conditions which costs they can recover. That is under the control of the MWSS, it is the only one that can decide which expenses are considered prudent and efficient that shall be allowed for recovery by the concessionaires,” Lazaro expounded.

 
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