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MWSS slaps P1-B sanction on Manila Water over water shortage

Metropolitan Waterworks and Sewerage System announced on Wednesday that it has imposed more than P1 billion sanction on Manila Water Company in connection with the recent water crisis in Metro Manila and Rizal province.

“Ito po 'yung consequence ng report namin kay Pangulo,” MWSS administrator Reynaldo Velasco said in an interview on Dobol sa News TV.

President Rodrigo Duterte has studied the report of the MWSS on the water crisis.

According to Velasco, the MWSS imposed on Manila Water Company a P1.134 billion sanction of which P534 million was fine, and P600 million as fund for a new water source.

Velasco said Manila Water will not charge the expenses for the development of the new water source to consumers because of the imposed sanction.

The sanction was due to Manila Water’s violation of Article 10.4 of the concession agreement after failing to provide 24/7 water supply to its consumers.

“The water shortage was an eye-opener, and sad to say, the new MWSS Board inherited this lingering problem having assumed office only in February 2017. We are on a catch up,” Velasco said.

In March, several areas in Metro Manila and Rizal serviced by Manila Water Company suffered from water service interruption due to lack of supply.

'Will abide'

In a statement, Manila Water said it will abide by the MWSS' decision.

“We will abide by the MWSS Decision to impose a penalty. While we are not the root cause for the inadequacy of the raw water supply coming from Angat Dam which we are mandated to treat and distribute, Manila Water, as agent and contractor of water services of MWSS, hold ourselves accountable for our inability to provide our consumers with the usual uninterrupted water service,“ Manila Water president and CEO Ferdinand dela Cruz said on Wednesday.

"Our inability to provide our usual 24/7 water supply to some of our consumers is because Manila Water's allocated water supply from Angat Dam is no longer sufficient for the total demand of the East Zone consumers," Dela Cruz added.

He said Manila Water's allocation of 1600 MLD has been unchanged since 1997 when the concession started. At that time, the east zone only had 3 million population.

"Today, Manila Water serves a population of almost 7 million people whose per capita consumption has significantly increased through over two decades of economic progress in Metro Manila. We cannot source any more from our system losses which have already been brought down to 12% from a high of 63% when we inherited the East Zone concession of Metro Manila in 1997," dela Cruz said.

New water source

Manila Water, however, said the development of new water sources is the MWSS' responsibility.

“Manila Water has strongly advocated for many years for the development of new water sources beyond Angat Dam, both to ensure sufficiency of water supply as well as resiliency in case of any calamity around the Angat Dam system. However, the development of new water sources is, under the Concession Agreement, ultimately the responsibility of MWSS,” Dela Cruz said.

On March 18, Dela Cruz took the blame for the shortage of water supply in the areas serviced by Manila Water.

"Ipinararating ko bilang pangulo ng Manila Water ang paghingi ng kapatawaran sa inyong mga constituents who are also our customers in our concession area... I am holding myself accountable for the sudden drop in our service levels to your constituents whom we have consistently served over the past 21 years with 24/7 water availability and sufficient water pressure," Dela Cruz said at a House hearing.

The company then announced last month that it would implement a one-time bill waiver scheme for customers severely affected by the water service interruptions.


The sanction was jointly announced by MWSS chairman Franklin Demonteverde and Velasco as "the MWSS Board unanimously approved the recommendation of MWSS Regulatory Office on the imposition of appropriate penalties on Manila Water relative to its failure to comply with Article 10.4 of the concession agreement."

The resolution was signed by Demonteverde, Velasco, together with MWSS Borad members Melchior Acosta Jr, Mariano Alegarbes,  Merly Cruz, Jose Hernandez, Valeriano Pasquil, Melanie Sia-Lambino  and Elpidio Vega.

Last March 26, Resolution No. 2019-052 that unanimously adopted by the MWSS Board directed the MWSS-RO to study the appropriate penalties to the East Zone concessionaire.

The P1.134-billion penalties are on top of Manila Water’s self-imposed penalty amounting to P500 million that provided financial relief to its customers affected by the water shortage.

Meanwhile, as part of the P1-billion fine for the recent water crisis, Manila Water was ordered to deduct P534 million in penalty from the bills of its customers.

Interviewed on Dobol B sa News TV on Wednesday, Velasco said the deduction could take effect in June.

"Pag-uusapan pa ng [MWSS] Regulatory Office at ng Manila Water yung mechanism nito. In most probability, sa June na ito ma-effect," Velasco said.

The water crisis that proved costly to Manila Water highlighted the lack of strategic preparedness notably on the realistic allocation of water supply to Manila Water, the development of new water supply sources and the much improvement of the Angat-Ipo-La Mesa tunnel and conveyance system, according to Velasco. —Joviland Rita and Ted Cordero/KG/RSJ, GMA News