House bill seeks reverting control of water districts to LGUs, ban on privatization

Opposition lawmakers in the House of Representatives have filed a bill seeking to revert the control and ownership of local water districts to local government units and banning privatization of public water systems, water treatment and distribution facilities and distribution facilities.

House Deputy Minority Leader France Castro of ACT Teachers party-list, House Assistant Minority Leader Arlene Brosas of Gabriela party-list and Kabataan party-list legislator Raoul Manuel filed the measure under House Bill 10150, arguing that affordable water rates and efficient water service have remained “a dream” since the privatization of government regulator Metropolitan Water Sewerage System (MWSS) under the 1997 Water Crisis Act of 1997, an action that effectively transferred operational responsibilities to two private concessionaires.

“Two decades later, the privatization of MWSS has only burdened consumers with higher water rates. From P2 to P4 in 1997, basic tariff rates increased to P34 to P47 in 2018. This is equivalent to a 970% increase for consumers served by Manila Water and 596% increase for those within Maynilad Water Services' jurisdiction,” the lawmakers said in their explanatory note on the measure.

The solons lamented that despite the said increases, the same problems of inadequate, unreliable coverage as well as chronic service interruptions remain, especially in urban poor areas.

As this developed, the legislators noted that a 2022 law granting another 25-year franchise for Maynilad and Manila Water signed by then President Rodrigo Duterte, as well as a renegotiated concession agreement signed in May 2023 which reintroduced the foreign currency differential adjustment (FCDA) scheme, further diminished the government’s role in securing safe, affordable and accessible water for the citizenry.

Further, the lawmakers noted that out of the more than 500 local water districts previously run as a government-owned or -controlled corporation (GOCC), nearly half have been privatized in the last few years.

“There is a need for Congress to review the continuing privatization of water services - a vital resource and basic need of the Filipino people...considering the negative impact on the rights of the people to safe, affordable and accessible water,” the representatives said.

The proposed bill provides that all water supply systems and facilities devolved to local water districts that have been privatized, including those subject to joint venture agreements (JVAs) and/or other similar forms of privatization schemes, are hereby re-nationalized and/or returned to the management, supervision and control of local government units (LGUs) pursuant to Sec. 17 of R.A. 7160 or the Local Government Code.

In addition, the bill authorizes re-nationalized water systems and local water districts to use the income derived from their operations to improve and upgrade the services they provide, provided that the supporting financial and work plans are first approved by the local water district's Board of Directors.

The bill defines privatization as the transfer of public utilities or organizations from government to complete or partial private ownership or control.

On the other hand, the bill defines local water districts as local corporate entities that operate and maintain water supply systems in one or more provincial cities or municipalities. 

“It is time to rethink the privatization policy of the country's public water systems and give back to the public sector the ownership and control of these vital public services, particularly the provision of water supply to citizens. Hence, support for this bill is earnestly sought,” the lawmakers said.

GMA News Online has sought comments from Manila Water and Maynilad and will publish their response as soon as they become available.—RF, GMA Integrated News