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Hard habit to break

“Both firms are also behind the poor Internet and phone services in the country in a duopoly despite the huge profit they cart in yearly from their subscribers.

TEB

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The water service concessionaires are now models of abusive behavior in the private sector as a result of the sinister maneuvers that hostage the public to hit profit goals that was recently bared by the President.

Deplorable is an understatement for the gimmick of withholding the supply of water to press for a rate adjustment or to collect money from the government.

The decision of Maynilad and Manila Water not to collect nearly P11 billion in awards from the Permanent Court of Arbitration (PCA) based on a provision in the contract, which was prematurely prolonged in 2009, was already an admission of excess.

Greed appeared to have backfired for both firms as President Rody Duterte said the series of water rationing that extended up to 10 hours in some parts of Metro Manila that started in March sparked the probe into the concession agreements with the government.

In one of his speeches, he recounted that after both utility firms announced water interruptions in Metro Manila, which prompted him to call officials of the state regulator Metropolitan Waterworks and Sewerage System and Maynilad and Manila Water, somebody whispered that there was water contrary to the two firms’ claims of low supply.

Rody narrated that he called up officials of the water firms and to whom he let loose his patented verbal assault. He warned them of the revocation of their contracts if service does not return to normal.

“The next day there was water,” Rody revealed. Apologists of the water firms are now suggesting that a new player will be eased into the water business which was the reason for the targeting of the two firms.

The poor services of both are too obvious, however. Both have been conspiring to get what they wanted from the government through the predictable service interruptions during the dry season and whenever they felt the urge to satisfy their itch for profit.

Performance was the sole reason that prompted a review of the 1997 deal with the government, Department of Justice (DoJ) Secretary Menardo Guevarra said.

The actions on both water firms’ contracts with government were also a Cabinet decision and not Rody’s.

“The Cabinet discussion on the concession agreements was spurred solely by the water crisis and not by any premeditated intent to bring in a supposedly new concessionaire,” Guevarra said.
Rody also expressed disgust over the treatment of water as a commodity in the contract instead of being a service to the public.

The reclassification was apparently meant to go around the constitutional limit of a 12 percent profit for utility firms.

“(T)he issue of whether the private water concessionaires are in fact public utilities is up for resolution by the Supreme Court,” Guevarra revealed.

Manila Water is a subsidiary of the Ayala Corp., while businessman Manuel V. Pangilinan’s Metro Pacific Investments Corp. owns a controlling stake in Maynilad. The two conglomerates are among the most powerful interests in the Philippines.

Both firms are also behind the poor Internet and phone services in the country in a duopoly despite the huge profit they cart in yearly from their subscribers.

The DoJ after reviewing the contracts found provisions that were “onerous and disadvantageous to the people, relative the terms or periods, government non-interference, as well as concessionaire indemnification for losses.”

Two of such provisions were the basis for the Singapore arbitration court order for the government to pay about P3.6 billion to Maynilad and P7.4 billion to Manila Water as compensation for losses and damages.

The most recent word from Rody is that he may deploy the military to run the water firms if they fail to reach an agreement with the government.

The water providers could have been screwing consumers for the past 22 years but Rody is intent on not letting them get away with it.

Big profit from poor service it seems is a habit for both business giants.

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