P50B equals zero service

Following the SC ruling, both concessionaires even threatened to pass on the penalty by raising the water rate up by 780 percent.

The government must consider taking over operations from Manila Water Company Inc. (MWCI) and Maynilad Water Services Inc. (MWSI) or terminating their concession deals for blatant violation of provisions of their contracts, particularly in failing to deliver 100 percent supply despite collecting P50 billion in advance from customers through charges in monthly bills.

In fact, water interruptions that run from four to 18 hours started yesterday for both customers of MWCI, owned by Ayala Corp, and MWSI of tycoon Manny Pangilinan, citing the low water level at Angat Dam which is the main source of water of Metro Manila.

Rodolfo Javellana, president of Water for All Refund Movement (WARM), cited various projects already paid for by customers of MWCI and MWSI through their monthly payments, yet both companies still failed to improve the delivery of services.

He cited the P732 million Wawa Dam project, the P45.3 billion Laiban Dam, the P4.3 billion Laguna Lake water supply project, the Tinugay sewerage treatment plant worth P800 million, the P130 million Novaliches aqua dam project, the P5.4 billion Angat replacement project and earthquake contingent projects.

“All of these were collected in advance from the public,” Javellana said during a broadcast interview.

“This is a clear violation of the concession agreement because under the agreement, number 1, there should be 100 percent water coverage in 10 years,” he added.

In an exclusive pre-State of the Nation Address interview with Daily Tribune, President Rodrigo Duterte said the public can even sue both private firms for “plunder” since they have been collecting fees for services that they do not provide.

Mr. Duterte noted the failure of both to put up water treatment plants despite charging their costumers for such facilities for years.

Only last week, the President lashed out anew at the water companies amid warnings from MWCI and MWSI of shortage of supply and their petition contesting a Supreme Court (SC) ruling slapping billions of penalties.

The SC upheld a Court of Appeals decision slapping P1.9 billion in penalties each for MWCI, MWSI and MWSS for violating the Clean Water Act.

Following the SC ruling, both concessionaires even threatened to pass on the penalty by raising the water rate up by 780 percent.

Both MWCI and MWSI inked 25-year concession agreements with the government in 1997.

Javellana stressed the water concessionaires are obliged not to impose any rate increase within 10 years after the agreement was reached and that supply should be 24 hours a day within the first three years of the agreement.

However, he noted that between 1997 and 2007, there was an increase in the water rates.

Javellana also hit the government regulator Metropolitan Waterworks and Sewerage System (MWSS) for allowing the advance collection by MWCI and MWSI.

“What is worse is that the MWSS is allowing the advance collections, but where are the projects, and it’s (water shortage) perennial,” Javellana said.

“What is clear is there is collusion and negligence, and these things are not being audited,” he added.

Sought for comment, Randy Estrellado, chief operating officer of Maynilad, junked Javellana’s claims.

“That is not true. There is no such thing as advance collection,” Estrellado told Daily Tribune.

On the contrary, Estrellado claimed that Maynila still has to recover P75 billion from its customers.

“Our concession is based on a cost recovery model where we spend in advance on capital and operating expenditures and recover these from the sale of water. As of the last rate rebasing exercise, Maynilad had advanced over P75 billion in the concession that it still has to recover,” he added.

Maynilad communications head Jennifer Casipit-Rufo echoed Estrellado’s pronouncements.

“No such thing as advance collection. The concession agreement is a reimbursement contract, meaning we advance expenditures for service improvement projects, and recover the cost of our investments over the life of the concession period,” Rufo said.

Daily Tribune also tried to get Manila Water’s side but got no reply as of press time.

Javellana cited the ongoing water supply shortage as a clear proof of the violation of MWCI and MWSI to the concession agreements, noting both are pointing to the lowering level at Angat Dam and climate change.

“It’s very clear that Maynilad and Manila Water did not abide by their contracts. That’s why MWSS and President Duterte should rescind the contracts because of the numerous violations they committed,” Javellana said.

Asked who will take over water distribution services, he said, “the MWSS is there.”

This is a clear violation of the concession agreement because under the agreement number 1, there should be 100 percent, water coverage in 10 years.

The MWCI franchise area includes Mandaluyong, Marikina, Pasig, Pateros, San Juan, Taguig, Makati, and parts of Quezon City and Manila. It also services Antipolo City and the Rizal towns of Angono, Baras, Binagonan, Cainta, Cardona, Jala-Jala, Morong, Pililla, Rodriquez, Tanay, Taytay, and San Mateo.

Manila Water has seven business areas, namely: Balara Business Area, Cubao Business Area, Makati Business Area, Marikina Area, Pasig Business Area, San Juan-Mandaluyong Business Area, and Taguig-Pateros–Rizal Business Area.

On the other hand, Maynilad manages water services in the cities of Manila (except San Andres), Pasay, Parañaque, Caloocan, Muntinlupa, Las Piñas, Valenzuela, and parts of Makati and Quezon City, including Navotas and Malabon. Its franchise area also covers Cavite City, and its municipalities of Bacoor, Imus, Kawit, Noveleta and Rosario.

“It looks like they (MWCI and MWSI) are just quick to collect payments in advance but, in the end, us consumers are the ones carrying the burden,” Javellana lamented.

“So, President Duterte should now intervene since he already issued a warning last March,” he added.

Javellana was referring to the President’s warning last March when there was also a water supply shortage in areas serviced by MWCI.

Environment Secretary Roy Cimatu yesterday reminded the MWSS to ensure that appropriate environmental and social safeguards are met in the implementation of the Kaliwa Dam project, which has been recently granted Environmental Compliance Certificate (ECC) by the Environment department.

Cimatu said the Department of Environment and Natural Resources (DENR) — through its Environmental Management Bureau (EMB) — will strictly monitor the compliance of MWSS with the conditions stipulated in the ECC.