Water firms can’t pass on to consumers SC fines —MWSS

The regulator of Metro Manila’s water concessionaires said Friday that the financial penalties slapped by the Supreme Court against Manila Water Co. Inc. and Maynilad Water Services Inc. cannot be shouldered by its customers.

Manila Water Co. Inc. on Thursday has warned of an “exponential” increase in water rates if the Supreme Court’s imposition of massive fines will not be reversed. The Ayala-led concessionaire warned that water rates could increase by as much as P26.70 per cubic meter or an increase of 780% “if the SC decision issued last August is not reversed.”

But the regulator made it clear on Friday that the concession agreement does not allow for that scheme placing consumers at a disadvantage.

“Fines and penalties cannot be recovered or pass on to the consumers,” Metropolitan Waterworks and Sewerage System (MWSS) Chief Regulator Patrick Ty told GMA News Online.

“This is expressly provided in the concession agreement,” Ty said.

Under the concession agreement with the MWSS, the penalties, interest charges on late payments, financing costs, bad debt provisions, and depreciation provisions are excluded in the items to be recovered by the companies.

The water concessionaire’s regulator was asked to comment on Manila Water’s threat of an “exponential” increase in water rates amounting to P26.70 per cubic meter or 780% “if the SC decision issued last August is not reversed.”

In August, Manila Water and Maynilad as well as the MWSS were slapped by the SC with fines amounting to P921,464,184 million for not complying with the Clean Water Act.

The parties were also fined P322,102.00 per day from the day they received a copy of the decision until they have fully settled the fine.

Manila Water has already talked with the MWSS Regulatory Office on the issue, Ty said. He did not elaborate.

Sought for comment, Manila Water communications manager Dittie Galang said the company cannot make any further comments as its motion for reconsideration was already submitted and now pending before the Supreme Court.

In its motion for reconsideration filed last week, the water concessionaire said the SC decision to impose various fines “have no basis.”

“Manila Water had complied with its sewerage responsibilities under the Clean Water Act (CWA) and should not be fined P921 million,” the company said.

In a press conference in Quezon City, Ty said the MWSS Regulatory Office is mandated to protect the interests of consumers—monitoring and ensuring that the concessionaires comply with the concession agreement.

“As such, the agency reassures the public that the financial penalties imposed on the concessionaires by the SC may not be recovered or passed on to consumers,” he said.

“This is clearly provided for in the Concession Agreement. Rest assured that the MWSS RO will prioritize the welfare of the public, and will do everything in its mandate to protect the interest of consumers,” he added. —VDS, GMA News