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The Freedom from Debt Coalition questioned Maynilad’s claim of losses incurred from the delayed implementation of the arbitration decision issued in December 2014 and challenged the water company to substantiate its claims.
“Maynilad is desperately trying to paint itself as a victim by saying it is losing money from the delay in the implementation of the water tariff increase resulting from the arbitration award it got last year. We have news for them. They are not fooling anybody. They are not losing a single penny and the MWSS-Regulatory Office’s decision is entirely justified as we cannot have an absurd situation where we have different rules for two concessionaires performing the same service,” Sammy Gamboa, FDC Secretary-General said.
FDC said that under the Concession Agreement (CA) between Maynilad and MWSS water rates are set at a level that allows the water company to recover its investments over the entire life of the concession.
“Maynilad’s claim that it is losing money due to the delay in the implementation of the water rate hike is disingenuous to say the least. It is well aware that based on the Concession Agreement, they are allowed to recover investments throughout the life of the contract, which will not end until 2037. The lop-sided CA guarantees that whatever amount it fails to recover now through the tariff increase, it can recover later,” Gamboa revealed.
“We must not forget that when the MWSS ordered Maynilad to lower its water rates following the 2013 rate rebasing exercise, Maynilad blocked the implementation by going to arbitration. It then argued that the implementation of the rate cuts should be delayed until the arbitration process comes to a resolution. Now that the shoe is on the other foot, Maynilad callously demands immediate implementation,” Gamboa remarked.
FDC called on the MWSS-RO to stand firm on its decision and not cave in to Maynilad’s attempt to pressure them by asking for P3.44 billion in compensation.
“We challenge MWSS to redeem itself after its failure to implement its 2013 rate cut order by standing fast in the face of Maynilad’s scare tactics. We believe this whole water rate mess should serve as an eye-opener not just for MWSS but for our policy makers in Congress and the Executive branch and pave the way for the eventual scrapping of the one-sided agreements with the two water companies,” Gamboa added.