01 December 2005
We, from the Freedom from Debt Coalition (FDC), are increasingly alarmed over the compliance of the Metropolitan Waterworks and Sewerage System (MWSS) to the ill-conceived Debt and Capital Restructuring Agreement (DCRA) with Maynilad. We are equally disgusted over the lack of transparency in how the said scheme, signed on 29 April 2005, was crafted and is being implemented.
We have, for several years, questioned the wisdom, or the lack of it, with which the MWSS exercised its authority by entering into bailout negotiations with Maynilad. The company’s rehabilitation plan aims to resuscitate the mismanaged, dying water company from its huge liabilities of P22.9 billion by using $53.67 million worth of public funds. And we are utterly appalled after uncovering the Commission on Audit’s Position Paper, dated 25 October 2005 and signed by COA State Auditor Atty. Norberto D. Cabibihan, which explicitly tated that the said plan, officially known as the DCRA, is grossly disadvantageous to the MWSS, and thus, to the public that the agency represents.
The COA paper only proves the MWSS’ headlong rush to save the Lopez-owned firm at the expense of public interest. It is highly troubling why the government, through the Metro Manila water agency, stubbornly insisted in crafting a losing proposition with an evidently negligent and inefficient concessionaire. A close scrutiny of the rehabilitation plan reveals that the government-owned MWSS has agreed to own 84 percent of the debt-ridden private water company by converting into equity some $22.67 million of Maynilad’s outstanding concession fees.
Further, the scheme obligates the MWSS to put in $31 million fresh capital into the bankrupt water concession. Further, by signing on to the DCRA, MWSS not only betrayed its mandate of protecting the interest of water consumers in Metro Manila, it has also acted beyond its authority. The COA, in its position paper, stresses that “to provide financial assistance is not within the acts of MWSS [as] enumerated within its Charter… ”This development adds more suspicion over the obscure way with which the government water agency and the West Zone concesisonaire are conducting their negotiations.
These entities, in effect, are deciding over the fate of Metro Manila water consumers without even consulting them! We feel aggrieved. The glaring detrimental effect of the DCRA, affirmed by the COA position paper, points to a betrayal of the public trust by the MWSS.
Being the government body recognized and authorized to ensure the interest of the public, the MWSS—its Board of Trustees and the Regulatory Office—owes the people an explanation on its bailout arrangement with Maynilad.
(signed) Ana Maria R. Nemenzo President
, Freedom from Debt Coalition