Class action suit filed vs. water concessionaires


More than 100 individuals filed a class action suit on Friday against water concessionaires Manila Water Co. Inc. and Maynilad Water Systems Inc. as well as the Metropolitan Waterworks and Sewerage System (MWSS).

The petition, captioned as a “Special Civil Action for Certiorari, Prohibition, and Mandamus with Prayer for Issuance of Temporary Restraining Order[s], Writ[s]of Preliminary Injunction, and/or Status Quo Ante Order[s],” assailed the monopolistic abuse, unfair pricing, and the flawed rebasing practice of the cited water concessionaires and government owned corporation.

The suit, which was filed by lawyer Francis Acero, counsel for the petitioners and the class which they represent, underlined that the MWSS, through the Office of the Government Corporate Counsel, is apparently joining the arbitration request recently filed by Maynilad and Manila Water “when it should have immediately implemented its own rate reduction orders of September 12, 2013.”

“A request for arbitration,” the petition argued, “is not an automatic stay of rate orders, for one aggrieved by such order should have applied for a stay order from the courts.”

MWSS should have immediately implemented the reduction of rates following the 2013 rate rebasing exercise, the petition asserted.

“But it appears well too convenient for all Respondents to use ‘arbitration’ as a reason for having it both ways: Maynilad and Manila Water will still enjoy, for an indefinite period as a sham and self-serving ‘arbitration’ is pending, tariff rates which have had no basis since 1997, layer upon layer, defect upon defect, through time, with MWSS apparently succumbing into the excuse as a way to self-enjoin their own recent 12 September 2013 downward adjustments,” it added.

The said suit, consolidating the claim of 150 petitioners, also alleged that the two arbitration proceedings initiated by Maynilad and Manila Water amounted to strategic lawsuits against public participation (SLAPP).

SLAPP refers to suits filed to stifle any legal recourse that persons or government entities have taken in order to enforce the laws.

The petition, moreover, argued: “SLAPPs are used by large corporations in efforts to silence individuals through high cost litigation, often without merit, in the expectation that the cost of the litigation causes the individual to abandon any initial complaints against the corporation.”

Both firms are also accused of systematically passing on capital expenditures, operating expenditures, future receivables of multi-billion dollar “ghost projects” and scuttled mothballed water infrastructure projects, to household water consumers in the east and west zones.

Subsidy scheme for supply problem
Meanwhile, a development studies expert pushed for an output-based subsidy scheme to address the water supply problems of remote municipalities.

Philippine Institute for Development Studies President Gilberto Llanto said there is a “great merit” in exploring output-based aid (OBA) scheme for the delivery of basic services like electricity, water, health and education to the poor.

Llanto said that such scheme could complement innovative financing models developed by the government financial institutions and the private sector under public-private partnership or private sector participation arrangements

He said such arrangements or schemes might provide innovative solutions to address the inaccessibility of safe water in small municipalities or rural areas.

“A strategy using OBA subsidy may create a strong incentive for private water service providers to operate in waterless municipalities,” Llanto said.

“There is no equivalent tax-and-subsidy scheme in the water supply sector but an OBA subsidy scheme could be explored as a component of private sector participation or public-private joint ventures to provide water services to waterless municipalities,” he added.



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