30 June 2007
Water right advocates over the weekend sounded the alarm against violations on human right to water and called for the speedy resolution of the case questioning the nature of Metro Manila’s water concessionaires. The said case, which was filed last year at the Supreme Court, pushes for the invalidation of a Board Resolution of the Metropolitan Waterworks and Sewerage Services (MWSS), which declared Maynilad Water Services and Manila Water Company, not as public utilities, but as mere agents and contractors.
The Freedom from Debt Coalition (FDC) - Blue Drop Campaign said that being “mere agents and contractors”, these two water and sanitation service providers are practically shielded from their accountability to the public.
FDC vice president Francis Isaac explained that the MWSS Board Resolution clouds the terms of these companies’ obligations in accordance to the people’s right to safe, adequate and affordable water because:
- It exempts the concessionaires 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 (in 1999 alone!).
- They 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 the public!
- They may invoke the resolution in refusing to extend their services to anyone within their jurisdiction.
- They are, in effect, now exempted from provisions expressed in Article XII, Section 11 of the 1987 Constitution, which limits foreign ownership of public utilities to at most 40 percent.
“It has been a year and yet, despite its severe impact to our lives, we are still to arrive at a conclusion to this case. And this is just a tip of the water privatization iceberg, which has long endangered people’s lives. If we cannot hold these companies accountable, what happens now to the victims of contaminated water such as the eight Tondo residents who died and the 800 more who were hospitalized in 2003? What does the future hold for the 212 waterless communities in Metro Manila?” asked Isaac.
Isaac stressed that public interest on water service provision is hijacked by profit-driven private corporations. “This is what we get when the government sinks itself deep in debt, refuses to spend public funds for much-needed basic social services and passes on this responsibility to business-oriented entities. Our experience with the debt-induced privatization of Metro Manila’s water service provision speaks a gloomy tale of unabated tariff hikes, unmet service obligations and upholding of the concessionaires’ interests at the expense of public welfare,” he said.
“Today we are sounding the alarm against these violations on human right to water, demanding the immediate declaration of Maynilad and Manila Water as public utilities, and raising our voices in unison against the perils of debt-induced, corporate-driven privatization,” Isaac said.