Maynilad, Manila Water to deal with stricter rules in revised deals

Maynilad Water Services Inc. and Manila Water Company Inc.will be governed by stricter rules under revised concession agreements with the Metropolitan Waterworks and Sewerage System (MWSS).

“Now the penalties for missing their service obligations will be bigger, unlike before. Their obligations used to be limited but now, non-revenue services are included,” MWSS chief regulator Patrick Ty said in an interview with reporters on Wednesday.

“Within the year, if they did not reach their targets based on the approved business plan, we can penalize them as well,” Ty said.

The revision of the water concessionaires’ agreements with the government was initiated under the previous administration after then President Rodrigo Duterte publicly protested a clause in the 1997 agreement with the two firms that held the government liable if it interfered with the implementation of water rates and accountable to indemnify the companies for losses incurred. The revised concession agreements were further amended with Maynilad and Manila Water signing it early this month, but its effectivity was retroactive from June 2022.

“We are making changes to better improve the services and make sure that Maynilad and Manila Water will be doing their job,” Ty said.

Among the changes was the inclusion of non-revenue water service—referring to water lost due to leaks or illegal connections—among the concessionaires' obligations.

Other obligations include water availability, water quality, water pressure, and effluent quality.

Under the revised agreement, a failure by a concessionaire to meet any obligation for more than 15 days or three days, in cases where public welfare could be adversely affected, can be a basis for the MWSS Regulatory Office to impose financial penalties, which could be equivalent to 25% of the costs of the service failure or depending on the obligation failed to be fulfilled.

Concessionaires are given 10 days to settle their penalties after receipt of demand from the regulator.

Ty said that any penalties collected from the concessionaires will be distributed to the consumers in the form of rebates.

Should concessionaires continue to fail to meet their obligations, Ty said, “The MWSS RO has the option to use other means provided in the revised concession agreement.”

“There are provisions that allow the RO to require concessionaires to fix things, if not we can get a third party to do it for them or recommend that concession agreement be improvised,” he said.

In separate statements, both Maynilad and Manila Water said they comply with the MWSS RO’s policies.

“We support the MWSS's initiatives to improve our service to our customers. We have been in discussions with the MWSS Regulatory Office to fine-tune the Implementing Rules and Regulations to ensure these are under the terms of the Revised Concession Agreement,” Maynilad said. 

On the other hand, Manila Water said it is  yet to receive the official notice from MWSS RO, but said it will “abide by any directives from our regulator.”

Maynilad currently serves customers in the west zone, which covers the cities of Caloocan, Las Piñas, Makati, Malabon Manila, Muntinlupa, Navotas, Parañaque, Pasay, Quezon, and Valenzuela. It also services certain areas in Cavite such as the cities of Bacoor, Cavite, and Imus; and the towns of Kawit, Noveleta, and Rosario.

Manila Water provides water and wastewater services to residents of the cities of Makati, Mandaluyong, Pasig, San Juan, Taguig, Marikina; and  Pateros. It is also in charge of the southeastern parts of Quezon City, and Sta. Ana and San Andres in the City of Manila. 

In the Province of Rizal, it services the City of Antipolo, and Municipalities of San Mateo, Rodriguez, Cainta, Taytay, Teresa, Angono, Baras, Binangonan, Jalajala, Cardona, Morong, Pilillia, and Tanay. —NB, GMA Integrated News