30 August 2007
Claiming that the national government incurred more debts because of failed privatization of water services in Metro Manila, a debt-watchdog today urged Congress to review and come up with better alternatives in ensuring the delivery of safe, affordable and accessible water to all without giving additional debt burden to the Filipino people.
In a forum, dubbed “Shaping People’s Agenda towards a Legislative Action on Water Services,” at the House of Representatives, the Freedom from Debt Coalition (FDC) – Blue Drop Campaign explained the negative effects of letting a public service fall into the hands of “greedy” and profit-oriented corporations and the failure of water concessionaires—Maynilad Water Services, Inc. and Manila Water Company, to achieve their targets based on the Concession Agreement.
FDC vice president Francis Isaac said: “After ten years, water privatization has:
- Paved way for high water tariffs;
- Failed to significantly reduce non-revenue water;
- Held no one accountable on Maynilad’s evasion on its accountability on the 2003 cholera outbreak;
- Failed to address major issues on delivering water supply service to 100 percent of its consumers by 2006 as there are still 212 “waterless” communities in Metro Manila;
- Failed to ensure the availability of uninterrupted 24-hour supply of water to all connected customers;
- Let go of Maynilad’s failure to deliver service targets and instead of deliberately filing a notice of early termination, MWSS and Maynilad still worked their way to preserve Benpres’ and Suez’ management of Maynilad, under a corporate rehabilitation plan;
- Violated basic sectors’ rights. Of the total 7,370 MWSS employees, only one percent was left with the Residual MWSS (48 percent women, 52 percent men). Six months later, the original MWSS workforce further shrank by 40 percent due to so-called early retirement (27percent) and voluntary/ involuntary separation (13 percent);
- Shielded Maynilad and Manila Water of their public accountability when the MWSS Board issued a resolution granting the concessionaires the status of mere agents and contractors—not as public utilities as explicitly stated by law.”
Moreover, when Maynilad failed to remit its concession fees amounting to P10 billion, the government was forced to borrow more money for the operations of MWSS.
These debts include: US$21 million in 2001 from the Philippine National Bank and Banco de Oro; US$260 million in 2003 from Keppel, Deutsche, First Metro Investment Corp., Rizal Commercial and Banking Corp., etc.; US$150 million in 2004 from BNP Paribas; and P780 million in 2004 MWSS bonds.
“Clearly, water privatization is not the solution to the looming water crisis and indebtedness of the government water agency. We urge our representatives in the Lower House to consider the reversal of the privatization policy on public utilities, especially water services, because water, next to air, is essential for our survival. We should not let any greedy and profit-oriented corporations manage our lives,” said Isaac.
Isaac also suggested other alternatives to privatization such as stronger regulatory mechanism and public-public partnership which is successful in Buenos Aires, Argentina.
“Argentina’s experience with public-public partnership is worth emulating. They know that external private operators have no real commitment to the local utility and that these companies will leave when they want. Just like what the former majority shareholder of Maynilad did. In public-public partnership, governments do not leave but remain responsible for the utility,” Isaac explained.
In response, Akbayan Rep. Risa Hontiveros-Baraquel said she will push for the review of Republic Act 8041, or the National Water Crisis Act of 1995, which paved the way for the privatization of MWSS, including the Regulatory Office created by virtue of the Concession Agreement between the government water agency and the two concessionaires.
“We should keep water as a public trust,” said Hontiveros-Baraquel, adding that she will deliver a privilege speech next week on the occasion of the 10th year of water privatization in Metro Manila and to call for its assessment.
Stressing the need for a review of the government’s privatization efforts, she echoed the call of FDC for stronger regulatory mechanism and openness to public scrutiny.
“Lack of government oversight and public scrutiny has been one of the strongest criticisms of water privatization. Without proper government supervision, privatization will not address issues related to water quality, or fair access to water regardless of income… We should ensure the protection of the public interests through a strong public regulatory oversight,” she said.
Aside from FDC and Akbayan, other presenters at the forum include representatives of Office of Sen. Antonio Trillanes IV, MWSS and National Anti-Poverty Commission, and Progresibong Alyansa ng Tagatangkilik ng Tubig sa Kamaynilaan (PATTAK).