Unlawful and betrays public interest¡-these words best describe what the officials of the Metropolitan Waterworks and Sewerage System (MWSS) did when they declared Manila Water and Maynilad mere agents and contractors.

What do MWSS Board Resolution No. 2004-201 and Regulatory Office Resolution No. 04-006-CA, which stripped the private water providers of their nature as public utilities, mean to more than 12 million water consumers in Metro Manila?

First, these water companies are exempted from the 12 percent profit margin limitation under Section 12 of the MWSS Charter. This means that Manila Water, which was found by the Commission on Audit to have registered a 40.92 percent rate of return on rate base (RORB) in 1999, could easily walk away with P281 million excess income.

Second, these private water distributors are freely charging consumers with additional P1.55 (Manila Water) and P4.14 (Maynilad) per cubic meter of water. This translates to about P6.33 billion (Manila Water) and P56.018 billion (Maynilad) worth of corporate income taxes being passed on to unsuspecting public.

Third, the water concessionaires may invoke these resolutions in refusing to extend their services to anyone within their jurisdiction.

Last, these concessionaires, in effect, are now exempted from the provisions expressed in Article XII, Section 11 of the 1987 Constitution, which limits foreign ownership of public utilities to at most 40 percent.

This betrayal of public interest utterly appalls us. Moreso, upon finding that the MWSS resolutions are in conflict with existing laws and jurisprudence on public utilities, such as:
  • That the services being provided by the Maynilad and Manila Water fall within the definition of ¡§public service¡¨ stipulated in Commonwealth Act 146, otherwise known as the Public Service Act, which was later upheld by the Supreme Court in its 1989 decision (Albano v. Reyes case);
  • That the principal characteristic of a public utility is service to the public and public use, not the possession of a franchise nor the ownership of the facilities; and,
  • That the nature of the contract is determined, not by the will of the parties but by the law.
We denounce and challenge these unlawful and treacherous acts of the MWSS officials!

We enjoin the public to support us as we file this petition for certiorari and prohibition before the Supreme Court. The MWSS resolutions must be declared invalid. Maynilad and Manila Water must return their over-collections due to excess in RORB and the passing on of their corporate income taxes to consumers.

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