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Beginning January 2003, consumers in the Maynilad areas will be billed 25 pesos per cubic meter from the current 15.46, while those in Manila Water areas will be billed 17 pesos from 6.75. While both rates are burdensome, Maynilad’s case is especially appalling because of the following reasons: 1) It has failed to comply with its expansion and service targets. Many of its target areas remain waterless, while those with connections suffer from low water pressure and have to make do with only several hours of water supply each day. On top of these, it has failed to lower the volume of non-revenue water (NRW) while incurring astronomical operating costs, probably for the huge salaries of its executives. 2) It has refused to pay concession fees to the MWSS since last year and threatens to withhold further payments until 2007. 3) It is asking the national government for a bail-out in terms of loan guarantees to the tune of P14 billion!  Aba’y talagang abusado! Palpak na nga, humihingi pa ng premyo! Manila Water has numerous transgressions, too, but Maynilad takes the cake for inefficiency and greed.

The water system was privatized with the aim of improving service, expanding connections and maintaining reasonable rates. Metro Manila was divided into 2 sections assigned to two separate concessionaires to encourage competition by checking one’s performance and prices against the other. There was a Concession Agreement—a purportedly inviolable document setting the parameters re pricing and performance for the two concessionaires. There is a Regulatory Office (RO) tasked to regulate the utility, and a residual MWSS office mandated with enforcing the contract. All these instruments have been useless in preventing dramatic price increases and in bringing about improved service in the water utility, especially in Maynilad areas. The Concession Agreement was changed via Amendment Number 1 last October 2001 to accommodate the “requests” of the two companies in the form of drastic jumps in water rates and lower expansion/service targets. The RO, under different leaderships, appears all too eager to justify the demands of the concessionaires. And now, it looks like even the Arroyo administration is going to bow to the wishes of the Lopez group by funding Maynilad’s loan restructuring requirements despite its rotten record.

As in the case of Meralco, there is the implicit threat that the economy will suffer greatly and services will be disrupted with the bankruptcy of a public utility firm such as Maynilad. Even Malacanang has said that it will support Meralco because it runs a public utility. That is the greatest irony of privatization: the government ends up supporting a lousy private company to run a utility whose control it could have retained. E kung popondohan din pala ng gobyerno ang Maynilad, bakit pa isinapribado ang MWSS? E di ganoon din pala!

It is plain to see that Maynilad cannot run the water utility decently. As such, its contract should be terminated by the MWSS Board and its areas returned to MWSS control. Government should not be in the business of salvaging badly-run businesses at the expense of consumers and taxpayers.

MAYNILAD: BULOK SERBISYO, TAAS PRESYO! MAGSARA NA KAYO!

GMA: LUGI NG MAYNILAD, HUWAG SA TAUMBAYAN IPABAYAD!

22 November 2002

BANTAY TUBIG COALITION

Citizens’ Alliance for Clean, Adequate and Affordable Water

Members: AKBAYAN Citizens’ Action Party *Alliance of Progressive Labor (APL) * Citizens’ Battle Against Corruption (CIBAC) * Freedom from Debt Coalition (FDC)* FOCUS on the Global South-Philippine Program * Institute for Popular Democracy (IPD)

Alliance of Progressive Labor (APL) 2002
Manila, Philippines
email: apl@surfshop.net.ph

http://www.apl.org.ph