Maynilad claims it's losing P208M monthly as MWSS refuses to enforce higher rates

Maynilad Water Services Inc. wants the Philippine government to protect it from losses as regulator Metropolitan Waterworks and Sewerage System (MWSS) refuses to implement the new water rates cleared by an international arbitration panel.

 

The company is supposedly losing at least P208 million for every month of delay in the implementation of higher water rates since January 2013, Maynilad claimed in an e-mailed statement Friday.

 

This situation has prompted the water utility to write a letter to the Department of Finance, invoking a Philippine government undertaking to pay for losses caused by the refusal of MWSS to implement the rate adjustments.

 

“MWSS and the Regulatory Office never once told us that they would refuse to honor and implement the arbitral award unless it is consistent with the outcome of another arbitration where we are neither a party, nor have we played any part whatsoever,” Maynilad CFO Randy Estrellado said.

 

Failure to implement the rate adjustment will also impact on the Philippine goal of attracting more foreign investments, the company claimed.

 

"While MWSS is the only government entity involved, the whole country would be affected especially in light of this administration’s efforts to attract foreign investors," Estrellado said.

 

"It is also chilling in the sense that MWSS positions itself above the law – all for a populist stance," he said.

 

On Monday, MWSS said it intends to wait for an international arbitration panel to first rule on the case of Manila Water Company Inc. before allowing Maynilad to raise its water tariff.

 

In 2013, the MWSS denied the respective requests of Maynilad and Manila Water to impose a higher water tariff under the five-year rate rebasing scheme. Instead, the regulator lowered the water rates for both companies. 

 

This drove the concessionaires to file separate dispute notices before the International Chamber of Commerce (ICC) in September 2013 and in October 2013 to challenge the rate reduction imposed by MWSS.

 

In December 2014, the International Appeals Panel ruled in favor of Maynilad to implement a higher tariff adjustment that includes passing the income tax burden to consumers.

 

"Going by the position of MWSS, the question we ask is: If Manila Water loses, will MWSS continue not to implement our rate adjustment?" Estrellado said. – Danessa O. Rivera/VS, GMA News