Manila Water to work closely with gov’t for ‘acceptable scheme’ on arbitral award

Robie de Guzman

MANILA, Philippines – Manila Water Co. Inc. on Wednesday said it is willing to work with the present administration to come up with a ‘workable solution’ to the recent arbitration decision which ordered the Philippine government to pay the water firm a P7.4 billion compensation.

In a statement, the Manila Water said the compensation order, which was issued by the Permanent Court of Arbitration in Singapore, was for acts in breach of the procedure committed by officials of the previous administration, not the Duterte administration.

The water firm made the statement after President Rodrigo Duterte on Tuesday night slammed the water concessionaires in Metro Manila for supposedly ‘onerous’ water concession deals.

Duterte said the government was being “milked by billions” after the arbitration court demanded the state to pay Manila Water P7.5-billion, and another P3.4-billion to Maynilad Water Service for losses or damages they suffered due to rejected petitions for a rate hike.

“We wish to reiterate that Manila Water is more than willing and have started to work with the incumbent administration to come up with a workable solution to the arbitration decision,” the Manila Water said.

The water concessionaire, which serves the east zone of Metro Manila, said that before the arbitration ruling was made public, the company’s executives met with Finance Secretary Carlos Dominguez to seek guidance, and to come up with a “mutually acceptable manner” of the award’s implementation.

The firm said this is because the case was filed due to a violation incurred by the previous administrations.

“Secretary Dominguez acknowledged our proposal to work very closely with his office to find a mutually acceptable scheme to address the award,” it said.

The utility firm stated that in 1997, it entered into a concession agreement with the Philippine government when the administration of then-President Fidel V. Ramos offered the Metro Manila concession to the private sector.

The Manila Water said it forged a deal with the Metropolitan Waterworks and Sewerage System (MWSS) to address the water crisis being felt then in Metro Manila, which they said existed due to the agency’s “incapability to maintain viable operations due to technical inefficiencies and enormous financial debt.”

“The Government unilaterally determined the terms of the agreements, which were bidden out on a take it or leave it basis,” it said.

Manila Water was one of many local and international corporations that responded to the Government’s call for a public-private partnership to solve the water crisis.

It offered the lowest fee to serve as a concessionaire of MWSS, which decided to pay the fee with the water tariff to be collected by the concessionaire. Manila Water was subsequently awarded the Concession Agreement for the East Zone, the firm said.

“Manila Water has diligently discharged its obligations as concessionaire of MWSS, spending over Php 166 billion to improve water and wastewater services,” it said.

“We have installed over 5,500 kilometers of pipes and built 2 new filter plants, 32 new reservoirs, 113 pumping and booster stations, 40 additional wastewater treatment facilities and five times more sewer network capacity to improve the MWSS facilities in the East Zone,” it added.

The firm said this resulted in the expansion of water service coverage in the East Zone from 67% coverage serving around three million people to 93% coverage serving over seven million people.

“This includes an additional two million customers from the poor and marginalized sector, who used to buy vended water in buckets or pails delivered by vendors in pushcarts,” it said.

“Manila Water services allowed them to save about 90% of what they used to pay for water. We also reduced water losses from 63% to less than 12%, saving 700 million liters per day of water,” it added. 

The water concessionaire also explained why its contract contained a provision for the adjustment of water rates.

“Because MWSS decided to pay our services and reimburse our costs with the water tariff that we collect, the Concession Agreement contains a procedure for the adjustment of water rates in accordance with the MWSS Charter,” it said.

“The Republic of the Philippines undertook to respect the procedure, which is under the full control of MWSS from beginning to end,” it added.

In 2009, the Manila Water said its contract was extended to 2037 after the administration of then President Gloria Macapagal-Arroyo recognized the compelling need for more water and wastewater investments.

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