14 October 2006
DEBT watchdog Freedom from Debt Coalition and Metro Manila water consumer group PATTAK today called on the public to stop the Metropolitan Waterworks and Sewerage System from re-bidding the government’s 84 percent stake in Maynilad Water Services, Inc, stressing that it is “illegal and founded on terms grossly disadvantageous to the government and the public.”
FDC vice president Francis Isaac said that 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.
“The bidding process is illegal,” asserted Isaac, citing the same COA memorandum where it is stipulated that 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.
PATTAK spokesperson Jess Del Prado said that 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,” said Del Prado.
The consumer group said MWSS's pursuance of water privatization is gross violation of the people's human right to water.
“Water is life. One cannot live without water. Then, why is the government pushing for the privatization of water services? Private corporations are only motivated by profit. Is the government putting the lives of 12 million Metro Manila residents in the hands of elite and greedy corporations?” argued Del Prado.
The MWSS has set October 24 as the deadline for the remaining four pre-qualified bidders to submit their proposals. The MWSS is selling its stake for a minimum amount of US$56.4 million or P3 billion. The winning bidder is expected to issue US$30 million as performance bond.
Pre-qualified are DM Consunji, Inc. and Metro Pacific Group; Manila Water Co., Inc.; Noonday Asset Management Asia Pte., Ltd of Singapore; at, Karunakaran Ramchand of India. -30-