12 November 2003
A few days ago, the International Arbitration Panel hearing the termination proceedings between MWSS and Maynilad Water Services Inc ordered Maynilad to pay government Php6Billion in unpaid concession fees on or before November 19, 2003.
A few days ago, the International Arbitration Panel hearing the termination proceedings between MWSS and Maynilad Water Services Inc ordered Maynilad to pay government Php6Billion in unpaid concession fees on or before November 19, 2003. This represents a major victory for taxpayers. Maynilad’s failure to pay concession fees since April 2001 has forced Government to borrow money to pay old MWSS loans whereas it would have used Maynilad’s payments for this purpose. Maynilad has exacerbated the debt problems of the country.
In anticipation that Maynilad will again attempt to delay payment, we call on the President Arroyo to stop her propensity to make deals with members of the business elite and desist from giving any kind of grace period for Maynilad!
The order on the concession fees notwithstanding, FDC believes that the Filipino people did not win as far as the overall Arbitration Panel decision is concerned. The Arbitration Panel failed to deliver justice as it declared that neither the Philippine government nor Manilad have any grounds for terminating the concession agreement between MWSS and Maynilad. The Arbitration Panel is saying that the millions of Maynilad consumers have to continue to suffer.
The Arbitration Panel has shown themselves to be blind to glaring evidences of inefficiencies and failures of Maynilad.
Despite six rate increases, Maynilad has failed to provide the quality of service it promised when MWSS was privatized in 1997. It worsened the wastage rate of water, from 58% before privatization to 70% based on the latest assessment of the regulatory office. Despite these failures, Maynilad officers and executives continued to be a pampered lot as found by the Regulatory Office in a report submitted to Congress last year.
Last week, Maynilad’s inefficiency turned from infuriating to deadly. A cholera outbreak in Tondo killed at least five residents while downing 500 others. Government officials found zero residual chlorine and less than the minimum water pressure needed to prevent the ingress of contaminated water into the pipe network. Yet Maynilad had the gall to say the residents are themselves to blame.
What they did not say is that the main reason behind the outbreak is Maynilad’s failure to put in the promised investments needed for pipe repairs and maintenance for the last six years. What they did not say is that Maynilad is responsible for maintaining only minimum pressure in their pipe network.
Maynilad pledged to put in a total of PhP23.858Billion by the end of 2001 in capital expenditures. The Regulatory Office found that Maynilad only spent PhP8.96Billion, a mere 38% of the promised outlay. We heard that Maynilad is diverting water from the slums of Tondo to more affluent areas in the South.
Today, thousands of residents not only in Tondo, but also in Caloocan, Navotas and Pasay are served with water not fit for drinking. With Maynilad’s failure to translate more than six rate increases into the improvement and repairs of their networks, more tragedies are waiting to happen.
Government has the duty to terminate the contract now. It should tell Maynilad to pay up, and go now.Boot Maynilad out of the West Zone!
Let government take over Maynilad’s operations!