Intl arbitration panel upholds Maynilad water rate hike

Customers of west zone concessionaire Maynilad Water Services Inc. can expect another increase in water rates after an the International Appeals Panel ruled in favor of the utility company.

 

However, Maynilad plans to impose the rate increase on staggered basis over three years as a way of  easing the burden on consumers, its ranking official told reporters in a briefing Tuesday.

 

The Appeals Panel, led by the International Chamber of Commerce (ICC), upheld the alternative rebasing adjustment of Maynilad in a decision on December 29, 2014.

 

The adjustment will result in a 9.8 percent increase in the 2013 average basic water charge of P31.28 per cubic meter, or an average increase of P3.06 per cu.m.

 

A typical household consuming 20 cu.m of water per month will see a P50.60 increase in their bills, while a household using 30 cu.m per month will have to pay P79.80 more in monthly consumption.

 

Originally, Maynilad asked for a 28.35 percent increase to P8.58 per cu.m in its average basic charge but Metropolitan Waterworks and Sewerage System (MWSS) denied the petition and instead approved a downward adjustment.

 

Under the concession agreements, Manila water concessionaires will adjust water rates based on inflation, investments and foreign currency adjustments as approved by MWSS. 

 

As this comes on the heels of a water rate increase due to adjustments in the value of the peso against the dollar, Maynilad CFO Randolph Estrellado said the utility company will seek a staggered implementation over the three years to 2017. 

 

"Ang plano namin i-stagger equally over a period of three years, ideally this year," he said.

 

Estrellado said Maynilad is asking MWSS to approve the staggered implementation of the rate increase.

 

"Doon sa concession agreement, obligasyon naming dalawa na ipatupad 'yung desisyon ng Appeals Panel. Dapat dumaan sa proseso, sa board approval at dapat pag-aralan kung paano i-stagger," he noted.

 

In a statement, Maynilad president Ricky Vargas said the decision ensures the continued implementation of the company's capital expenditure projects that are intended to benefit customers.

 

During the briefing, Estrellado said 65 percent of the tariff will cover the recovery of income tax and the balance will be for the projects to improve services.

 

"Yung lahat ng projects na kailangang gawin para ma-meet ang target service levels tulad ng 100 percent sewerage coverage at improvement ng water pressure from 7 per square inch (psi) to 16 psi," he said.

 

Maynilad serves the West Zone of Metro Manila, including the Cities of Manila (all except portions of San Andres and Sta. Ana), Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas, Malabon and parts of Quezon City and Makati.

 

It also serves  Cavite City, Bacoor City, Imus, Kawit, Noveleta, and Rosario in Cavite province. – VS, GMA News