28 October 2004
The Freedom from Debt Coalition (FDC) demands the immediate pullout of Benpres Holdings and its French partner, Suez-Ondeo, from the West Zone water concession. Instead of a corporate rehabilitation, their contract must be terminated now!
It has been seven years since the government handed over to private hands Metro Manila’s water distribution utility—Asia’s (and even the world’s) biggest water privatization undertaking at that time. Now, the government and the profit-motivated water companies have nothing to show but their bungled attempts to provide water for the city’s 12 million population* and more debts for the Metropolitan Waterworks and Sewerage System (MWSS).
In the west zone alone, water rates have ballooned from P4.96/cubic meter in 1997 to P19.92/m3 and will be raised further to P26.98/m3 once Maynilad’s rehabilitation plan is approved. Worse, consumers will not be reimbursed more than P2 billion of Maynilad’s over-collections through its continued charging of the Accelerated Extraordinary Price Adjustment (P4.21/m3) and the Foreign Currency Differential Adjustment (P4.07/m3). Maynilad’s collection of the AEPA and the FCDA has been ordered stopped, but in vain, by the MWSS Regulatory Office in 2003.
Maynilad’s non-payment of its long overdue concession fees, now amounting to more than P10 billion, has also forced MWSS to incur more debts----$21 million in 2001, $260 M in 2003 and $150 M in 2004.** With Maynilad’s rehabilitation plan, it is likely that MWSS will again resort to more borrowings since the concessionaire intends a staggered payment of its accrued and accruing concession fees. Concession fees are the agency’s source of funds for the payment of its old debts and for the operations of the MWSS and the Regulatory Office.
To top it all, Maynilad has failed to provide decent service to seven million residents west of Metro Manila. Up to now, water supply is intermittent and kept at low pressure—the reason for the cholera outbreak that hit Tondo (where six people died and 600 more were hospitalized) and Malabon last year. Up to now, the victims of Maynilad’s disregard to people’s right to clean and affordable water remain to be indemnified. Worse, these communities, along with other urban poor areas, might suffer more since the company intends to prioritize “opportunity areas” once its rehabilitation goes underway.
FDC demands that the public must not be forced to bear the brunt of Maynilad’s corporate mismanagement and greed. We must not allow Benpres and Suez to be bailed out through corporate rehabilitation. Maynilad’s new rehabilitation plan must be opposed and its concession agreement must be ended at once!