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july12.2013_bMakabayan bloc formally asks for congressional review of MWSS deals with Maynilad and Manila Water

july12.2013_bMakabayan bloc formally asks for congressional review of MWSS deals with Maynilad and Manila Water

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Makabayan bloc formally asks for congressional review of MWSS deals with Maynilad and Manila Water
Makabayan bloc formally asks for congressional review of MWSS deals with Maynilad and Manila Water

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Published by: pribhor2 on Jul 12, 2013
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JULY 12, 2013

NR # 3162B

Makabayan bloc formally asks for congressional review of MWSS deals with Maynilad and Manila Water
The Makabayan bloc in the House of Representatives is formally seeking a congressional review of the concession agreements between the Metropolitan Waterworks and Sewerage System (MWSS) and water concessionaires Maynilad Water Services Inc. and Manila Water Company, and if warranted, is urging the chamber to take action to stop any impending water rate increases pending termination of the review. Through House Resolution 14, Reps. Fernando Hicap (Party-list, Anakpawis), Neri Javier Colmenares (Party-list, Bayan Muna), Luzviminda Ilagan and Emmi de Jesus (Party-list, Gabriela), Antonio Tinio (Party-list, ACT Teachers) and James Mark Terry Ridon (Party-list, Kabataan) called on the House Committee on Government Enterprises and Privatization to conduct a comprehensive review of the MWSS deals with the two water concessionaires. Maynilad and Manila Water recently announced they are seeking to increase the average water charge. Aside from the basic water charge, they will also hike other tariffs that are computed based on the basic charge, including but not limited to the Foreign Currency Differential Adjustment (FCDA), environmental charge and Value Added Tax (VAT). According to the Makabayan bloc, the impending water rate increase means profit for Maynilad and Manila Water. It said the “adjustment schemes” under the guise of privatization would only benefit the big local and foreign businesses. Ordinary citizens, particularly the poor, are the ones who will be affected by these high water rates and impending increases. The government must exercise its decisive political power to protect the interests of the consumers for the safe, affordable and efficient water services,” said the group. The group cited that based on the urgent appeal submitted by Anakpawis Party-list to the MWSS to stop impending water rate hikes and onerous charges, Maynilad is seeking to raise the average water tariff by 22% or from P28.89 to P34.12 per cubic meter. Meanwhile, Manila Water wants an increase from P33.97 to P44.27 per cubic meter. This is equivalent to an increase in the basic charge of P10.30 per cubic meter and P5.83 per cubic meter, respectively. The Makabayan bloc cited the said increases are part of the rebasing process. It said that based on the computation of IBON and advocacy group Water for the People Network (WPN), the all-in tariff is expected to increase by P13.71 per cubic meter for Maynilad and P7.81 per cubic meter for Manila Water. “For an ordinary household consuming 30 cubic meters per month, water rates could increase by as much as P411 for Maynilad and P234.30 for Manila Water consumers,” it said. The MWSS earlier had said the impending water rate hike was expected to take effect last July 1, 2013 once the rate rebasing process is completed.

It was during the administration of former President Fidel Ramos that water services were privatized and a public-private partnership with local and foreign water firms was forged. Since the privatization of water services in Metro Manila and nearby provinces, consumers have endured frequent water rate increases according to the Makabayan bloc. “The all-in tariff of Maynilad has increased by P39 per cubic meter or 547%, while that of Manila Water has increased by P34 per cubic meter or P850%. Increases were made despite bad service and failure of private water concessionaires to achieve universal service coverage,” said the group. It noted that the water firms have conveniently used 25-year concession agreements for their water rate hikes. “Adjustment in basic tariffs every five years through rate rebasing is to recover historical capital, operating and investment expenditures and review of operating and investment plans. The rate rebasing process will be done throughout the lifespan of the concession agreement,” it said. According to the solons, other questionable charges, which have been unjustly doublecharged and collected from consumers are foreign exchanged tariffs. Aside from the Currency Exchange Rate Adjustment (CERA) fixed at P1 per cubic meter, water firms are also collecting Foreign Currency Differential Adjustment (FCDA). Both tariffs are meant to allow the firms to recover or compensate foreign exchange movements from MWSS loans and concession fee payments according to them. The Makabayan bloc also cited observations of the Bagong Alyansyang Makabayan (BAYAN) and WPN that recent public consultations initiated by the MWSS on water rate hikes were “not transparent” and that water firms failed to present their grounds for their return on rate rebasing plans and have deliberately skirted legitimate inquiries from consumer groups related to the transparency of their collections and profits. The bloc dismissed the minimal decrease in water bill starting July 2013 announced by Manila Water and Maynilad as an attempt to mislead the public and preempt public reaction that will surely result from the huge increases sought by the water firms due to rate rebasing. Lastly, the Makabayan bloc also highlighted the reminder of Catarina de Albuquerque, United Nations Special Rapporteur on the human right to safe drinking water and sanitation, to UN members that “Government regulation must be biased for ensuring the right to water of the people. The State is obliged to progressively realize the right to water and sanitation. In the context of non-State service provision, this requires ensuring meaningful participation and access to information in the decision to delegate services to non-State actors… The State must put in place a regulatory framework to ensure compliance with human rights standards, as well as complementary social policies, for instance to ensure the affordability of services, where needed…” (30) rbb

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