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Ayala-led Manila Water seeks arbitration vs. MWSS rate reduction


Manila Water Company Inc. on Tuesday said it filed a dispute notice before the International Chamber of Commerce, challenging a rate reduction imposed by regulator Metropolitan Waterworks and Sewerage System (MWSS).
 
"Manila Water has decided to go into arbitration after MWSS, in its decision, cut away significant programs for building and maintaining water and wastewater systems in the East Zone which will severely compromise and impair the former's ability to fulfill its service obligations to customers," the company noted in an e-mailed statement.
 
Starting October, water rates are going down after the MWSS Regulatory Office turned down separate petitions concessionaires Manila Water and Maynilad Water Services to raise water rates in their respective concession areas – with Maynilad Water in the west Zone.
 
In the case of Manila Water’s 2012 average basic water charge of P24.57 per cubic meter, the MWSS board approved a minus 29.47 percent adjustment to be implemented in five equal tranches of  -5.894 percent a year. Ayala-led Manila Water was seeking a basic rate increase of P5.83 per cubic meter.
 
The MWSS board also approved a minus 4.82 percent rate adjustment on Maynilad Water’s 2012 average basic water charge of P30.28 per cubic meter, to be implemented in five equal tranches of -0.964 per year. Maynilad Water asked for an P8.58 per cubic meter rate increase starting this year until 2018.
 
The concessionaires were unable to justify the necessity of increasing waster rates according to their respective business and investment plans in the next five years, said MWSS acting chief regulator Emmanuel Caparas, citing why the board decided to approve a downward adjustment in water rates. 
 
In case of disagreements that cannot be resolved via consultation or negotiation, the water concession agreement provides for a clause on resolution by arbitration before a panel whose members are – particularly in this case – representatives of MWSS and Manila water, with an International Chamber of Commerce representative as appeals chairman.
 
Existing water rates are kept in place until the appeals panel arrives at a decision.
 
On the other hand, Maynilad is preparing its dispute notice. 
 
“Our legal team is still working on our dispute notice,” said Cherubim Mojica, Maynilad Water spokesperson. “We hope to file it soon but we do not have a definite date (for the filing) yet,” Mojica added. – VS, GMA News
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