Impending water rate hikes baseless, terminate CA – WPN

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Advocacy group Water for the People Network (WPN) said that looming water rate hikes are unwarranted since consumers have long been over-charged to ensure profits for the two water concessionaires. On World Water Day, the group said that the Duterte administration should rescind the onerous concession agreements (CA) with the Pangilinan-Salim group’s Maynilad Water Services, Inc. and the Ayalas’ Manila Water Co., and take initial steps to reverse the privatization of the country’s water utilities.

The Regulatory Office (RO) of the Metropolitan Waterworks and Sewerage System (MWSS) announced in early this year that it has submitted its recommendation to raise water rates by Php0.70 per cubic meter for Maynilad and Php0.37 per cubic meter for Manila Water.  However, the proposed increases are pending the approval of the MWSS board, which has yet to be appointed.

According to the MWSS, reasons for the hikes are changes to the basic charge due to inflation and fluctuation in forex rates. Under the CA, water concessionaires can adjust the basic charge every January 1 to account for inflation as measured by the consumer price index (CPI) in July the previous year.  Meanwhile, the basic charge is also adjusted every quarter to reflect foreign currency changes which is listed in the water bill as FCDA or foreign currency differential adjustment.

WPN states that the CA is designed to unnecessarily adjust tariffs to ensure the water firms of profits. Water consumers are hit twofold at the beginning of each year since they have to bear the burden of both the rise in prices of basic goods and services, as well as the increase in water rates due to inflation. Consumers are also being double-charged for currency fluctuations through the FCDA and the fixed Php1 currency exchange rate adjustment (CERA).

Instead of the affordable water rates promised by the privatization of MWSS, consumers have been forced to pay for continuously rising onerous charges. WPN estimates that since 1997, water concessionaires have raised their basic charge by 973% for Manila Water and 583% for Maynilad.

WPN said that the Duterte administration should renege the dubious CAs with Maynilad and Manila Water. Government should instead protect and ensure the public’s right and access to water by reversing water privatizaiton, said the group.###

 

 

 

 

 

 

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