Posted by: wpn.secretariat | March 30, 2013

Double-charging cost Maynilad, Manila Water consumers P7.2 billion- Bayan

News Release | 22 March 2013 | Multisectoral alliance Bagong Alyansang Makabayan (Bayan) alleged that private water concessionaires in Metro Manila have collected about P7.2 billion from consumers due to double-charging of foreign currency adjustments. The allegation stemmed from the concessionaires’ collection of the fixed P1 per cubic meter (cu. m.) in currency exchange rate adjustment (CERA) alongside the foreign currency differential adjustment (FCDA).

Bayan made the statement as it marked the World Water Day with a protest rally in front of the main offices of Maynilad Water Services Inc. and Manila Water Co. in Quezon City.

The protest came ahead of a substantial increase in water rates is looming due to the scheduled rate rebasing of the concessionaires, also a mechanism established by the privatization Concession Agreement. Maynilad is reportedly asking for an increase of P10.30 per cu. m. while Manila Water is seeking a P5.83-per cu. m. rate hike. This despite unresolved allegations that the concessionaires charged their consumers in the last rebasing in 2008 for projects that were never implemented.

Two mechanisms

The P7.2 billion from forex recoveries represent the P1-per cu. m. CERA charged on the volume of water billed by Maynilad and Manila Water from 2002, when they began collecting the FCDA, until September 2012 (latest available data). Of the said amount, Maynilad accounted for P3.4 billion and Manila Water, P3.8 billion. 

The FCDA was introduced in the 2001 amendment to the Concession Agreement. It allowed the concessionaires to automatically adjust their rates every quarter to reflect changes in the foreign exchange (forex). It was meant for Maynilad and Manila Water to recover losses due to peso devaluation that increases their foreign loans and payments of dollar-denominated concession fees to the MWSS.

“This is doubly oppressive for consumers. It’s bad enough concessionaires are allowed to recover forex adjustments, but to have two automatic recovery mechanisms for this? This shows the folly of privatization and its drive to ensure the profits of the investors,” said Bayan secretary general Renato M. Reyes, Jr.

“Given this situation, the recent water rate adjustment is a token measure,” Reyes said.

A recent rate reduction was implemented by Maynilad and Manila Water, amounting to16 centavos and 44 centavos per cu. m., respectively.

Aside from the FCDA and CERA, Maynilad and Manila Water are also allowed to impose the so-called extraordinary price adjustment (EPA) which is triggered by practically anything that could adversely impact the profits of the concessionaires.

“Today is World Water Day but the there is really nothing to celebrate as water in the Philippines has become such an expensive commodity controlled by private corporations. We are being subjected to so many onerous charges and taxes. This will be the situation for years to come unless government steps in and regains control of the water system and fulfil its mandated duty to the people,” Reyes said.

“We will definitely oppose any plan to increase water rates in the coming months. We will take this battle right at President Benigno Aquino III,” he added.  ###

 

 

 


Responses

  1. For years, we’ve been complaining about the water rates here in Filinvest East Homes – Antipolo. The objective was to lower the water rates by having Maynilad come into the subdivision and take over the water facility/services. They started by laying the main water lines along the main road (inside the subd), but didn’t continue on layng the pipes into the individual homes. Thereby causing the Homeowners Association (previously by Filinvest developer) to manage the water service/billing/collection instead. The current water rates add-on on top of Maynilad water rates is quite significant (it seemed 2 to 3-fold). Now with the upcoming Maynilad’s request to increase the water rate, the impact of water rate increase will be much more than ever.

    I don’t have a problem if Maynilad would like to increase their water rates, but for God’s sake, take over the management of our water service here in our subdivision. So that we could have a fair water rate. If they don’t have the capability to do so, then a big “NO” to water rates increase!!!

    Hope this reaches the proper authorities for immediate action.

  2. I am not sure if you are aware of this. I read a document just like Double-charging cost Maynilad,
    Manila Water consumers P7.2 billion- Bayan | Water for the People Network the other day on .
    .. crapski I can’t remember the internet page just now however it was also about big gun too. I will get back to you if it comes to me.


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