09 October 2006
The Freedom from Debt Coalition is deeply concerned over the MWSS (Metropolitan Waterworks and Sewerage System) officials' mindless pursuance of the re-bidding of the government's 84 percent shares of ownership in Maynilad Water Services. Cloaked with baseless pronouncements of improving water services in the West Zone, this devious scheme has been flawed since the beginning and its implementation will be tantamount to victimizing unsuspecting water consumers. This is unacceptable and must be stopped on all fronts and at all costs.
Why should consumers oppose the re-bidding of Maynilad?
First, it is founded on terms grossly disadvantageous to the government and the public. In a memorandum dated 25 October 2005, the Commission on Audit (COA) explicitly stated that the Debt and Capital Restructuring Agreement (DCRA), which lays down the fiscal assumption of the on-going re-bidding process, is “grossly disadvantageous on the part of the MWSS” because the latter would now have to shoulder the debts of Maynilad, apart from addressing its own maturing liabilities.
Second, the re-bidding process is illegal. According to the same COA memorandum, the MWSS decision to provide financial assistance to cash-strapped Maynilad is not within the acts of MWSS under its Charter and therefore “constitutes an ultra vires act.” The said financial assistance refers to the $31 million capital infusion by MWSS that will be sourced from a government-guaranteed loan from the World Bank. This, therefore, raises questions on the right of MWSS to resell its “agreed upon” majority ownership in Maynilad since its authority to enter into such an agreement remains questionable and unsettled.
Third, having another private operator of our water distribution system does not guarantee improvement in water services. Efficient and high quality water service can only be guaranteed by an effective and independent regulatory structure. Unfortunately, the MWSS Regulatory Office (MWSS-RO) is often perceived as institutionally weak and too vulnerable to pressures from the water concessionaires. Private corporations are largely motivated by profit; hence, it will most likely maximize the profit potentials of its business undertakings. This negates the service-orientation of a water utility that is in charge of providing water services.
Fourth, we caution the public against a possible monopoly in the distribution of water services in Metro Manila. Manila Water, the East Zone water distributor, has been allowed by the MWSS to join in the re-bidding, and is one of the four pre-qualified bidders. This spells further trouble for Maynilad consumers.
Since 1997 for example, water rates in the East Zone have increased by 700%, from P2.32 per cubic meter when the bid was won to the present rate of P19.73 per cubic meter. Last year, Manila Water even requested for an extension of its income tax holiday even with its high profits for 2005. Worse, the Board of Investments (BOI) granted this petition, at a time when the government suffers from revenue shortfall.
Finally, MWSS's pursuance of water privatization is gross violation of the people's human right to water. A close scrutiny of the water privatization experience of the past nine (9) years would prove that it is a medication far worse than the disease. Water supply targets remain unmet since the two concessionaires’ service areas are only able to supply water for less than 21 hours a day. Even the controversial Maynilad rehabilitation plan, which basically seeks to salvage water privatization policy, provides unacceptable features that include, among others:
- Staggered payment of the long-overdue concession fees;
- Lowering of water pressure targets from 16 pounds per square inch (psi) to 7 psi;
- Illegal increase of water rate by P10 per cubic meter; and,
- Additional two-year delay in water supply and sanitation targets.
These unjust provisions are indeed taking toll on the unwitting public. Particularly disconcerting is the delay in the expansion of water supply considering that about 80% of water-less communities in Metro Manila are part of Maynilad’s concession area.
Neither has privatization addressed the health concerns surrounding water service delivery. The cholera outbreak in October 2003 in the service areas of Maynilad affected 800 people from Tondo, Malabon and Caloocan, killing eight (8) of their residents. Until today, the cholera victims have yet to be indemnified by the said water company.
We are prompted to ask: Whose interest are the officials of MWSS serving? Why do they persist in favoring private profit over public interest?
It is with utter dismay and rejection that we view the MWSS officials’ record in handling the Maynilad water project fiasco. Therefore, FDC calls on all concerned consumers to unite in the effort to stop the re-bidding of Maynilad. We will be launching a sticker and signature campaign starting today, 9 October 2006, to register the public’s indignation over the re-bidding process. This will also be followed by a series of protest actions and a public information drive to gather more support. TOGETHER, LET US ALL OPPOSE THIS FRAUDULENT PROCESS!
STOP DEVIOUS AND DEBT-INDUCING MAYNILAD RE-BIDDING SCHEME
PUBLIC SERVICE, NOT PRIVATE PROFIT!