QUEZON CITY, Philippines – Angry water consumers, led by the Freedom from Debt Coalition, today staged a protest action against a P7.10-increase in the basic tariff being proposed by the Maynilad Water Services, Inc. for households consuming 30 cubic meters a month.

Outside the venue of a “public consultation” at SEAMEO Innotech along Commonwealth Avenue, FDC members, carrying water buckets and wash basins, stressed that the proposed rate hike is unsympathetic to the plight of millions of Metro Manila west zone water consumers, particularly the poor.

“We oppose the unconscionable rate hike being peddled by Maynilad, and condemn as insensitive Maynilad’s profit-oriented attempt to proceed with business as usual in the midst of a financial crisis that has left the poor extremely vulnerable to the slightest rate increase in basic necessities. With 86 percent of Maynilad’s consumers composed of residential connections, 20 percent of which belong to depressed communities, the company’s proposed rate increase cannot be taken lightly,” FDC said in statement.

FDC also said that the proposed amount is misleading and does not fully present the impact of this proposed increase, citing the corresponding increase in value-added tax (VAT), environmental and sewerage charges that are all based on the basic tariff charge.

“With these other charges,households connected to Maynilad’s sewer lines will experience an increase of at least P11.93 per cubic meter, while those without sewer services will take on an increase of P8.75 beginning January 1, 2009. In the final equation, the average household’s monthly bill will go up by P262 - P357,” FDC said.

The proposed rate adjustment is part of the rate rebasing exercise, a scheduled business mechanism done once every five years that paves the way for large rate hikes based on new business plans proposed by water concessionaires to the Metropolitan Waterworks and Sewerage System – Regulatory Office (MWSS-RO).

The debt watchdog also demanded that Maynilad reveal a breakdown of the company’s proposed rate hike to publicly show how much of what is to be paid will actually go to the payment of corporate taxes, to the payment of MWSS loans and loan interests, and to the actual projects that they are proposing to undertake.

“From the P7.10 increase, how much will go to Maynilad’s coffers as revenue? How much of the proposed increase will be allocated to corporate perks for Maynilad’s executives? These items must all be properly laid down in any consultation that purports to seek public approval for a rate increase. The people’s right to refuse paying for unnecessary extravagances must be recognized. We should know what we are actually paying for. Without such transparency in the rate proposal, the public consultation being held will amount to nothing more than a procedural farce,” the group stressed.

FDC claimed that Maynilad’s current rates are already being disputed as over-priced, thereby placing in doubt any moral ground to demand further increases. A civil case filed by civil society groups questioning Maynilad’s rate hike of January 2005 still remains pending until today due to the company’s stubborn refusal to submit its rates under the jurisdiction of the National Water Resources Board, the only water regulatory body with quasi-judicial functions to look into water rates for consumer interests. To this day, the question of whether or not the consumers are paying too much still remains unanswered.  

“It is therefore sheer temerity on Maynilad’s part to demand a rate hike it does not deserve. Maynilad is nowhere near the service targets it submitted in 1997 and still owes the MWSS at least $36.9 Million in unpaid concession fees, not inclusive of a disputed $18.1 Million also claimed by MWSS as additional concession fees. These fees, which should have rightly been paid years ago, have been permitted to be restructured so as to give Maynilad’s new management more room to breathe. Are we to understand then that while the government willingly bailed out Maynilad when it was in dire financial straits, that same government will now stand idly by as Maynilad demands a rate hike that the poor cannot afford?” asked FDC.

“Where is the government in all this? Government itself has also come to earn revenues from Maynilad’s consumers, and continues to insist that Metro Manila consumers should shoulder all the expenses of water provision. It has already collected more than P1.6 Billion in VAT revenues from Maynilad’s consumers in the years 2006 and 2007. More has been collected in prior years. As the Senate debates the allocation of taxes collected from the people, we call on them to reconsider the moral propriety of refusing to allocate people’s taxes to something as basic as water provision,” the group said.

“The welfare of consumers in more than 600,000 household connections in the west zone of Metro Manila must be protected from the non-transparent profit mechanisms employed by Maynilad. We refuse to wait until disconnections are imposed on 150,000 destitute households that cannot afford the rate hike. We call on government to do the same,” FDC said.  -30-

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