MEMBERS of urban poor and militant groups on Tuesday marched to the Metropolitan Waterworks and Sewerage Systems (MWSS) head office to demand the full refund of some P15 billion in added charges that were illegally passed on to consumers.
Anthony Barnedo, secretary-general of the Kongreso ng Pagkakaisa ng Maralita ng Lungsod (KPML), particularly demanded that the MWSS compel water concessionaires Maynilad Water Services and Manila Water Company to return the extra charges to consumers.
He said the refund should be given immediately.
“All these blunders by the MWSS Regulatory Office is not solely on the shoulders of the administrator but is second nature to the onerous and highly-flawed concession agreements [CA] it signed in behalf of the people, which ultimately punished the people,” Barnedo said.
The militant and urban poor groups claimed that the MWSS failed to keep a close watch on its two concessionaires, which systematically exploited their consumers despite their inadequate services and high rates.
Gie Relova, the secretary general of the Bukluran ng Manggagawang Pilipino-National Capital Region and Rizal (BMP-NCRR), lamented that the promise of cheaper rates and quality water services through privatization only brought misery to the people.
She said the services of the two concessionaires must be discontinued to pave the way for better services to the consumers.
Paid ads too
Rodolfo “RJ’ Javellana of the group Water for All Refund Movement (WARM) questioned the concessionaires’ paid advertisements in major dailies that came out on Tuesday.
Javellana said the money used for the full-page ads may also have come from the pockets of consumers.
In their paid ads, the water concessionaires hit back at their critics and pointed out that the concession agreement (CA) allowing them to charge their income taxes to consumers was approved by the government years ago.
Maynilad and Manila Water said the highly-criticized CA was a contract that was “[written], reviewed, approved and guaranteed” in 1996.
The two companies said the concession agreement provides for a mechanism that determines the “appropriate market-based rate of return on the concessionaires’ investments.
Maynilad, the west zone concessionaire, said it did not violate any terms of the CA and said this mechanism “takes into account corporate income taxes.”
On the other hand, Manila Water, the east zone concessionaire, said it has stayed faithful to the provisions of the CA “because we believe in its merits, fairness and noble intent. We have not done, and will not do, anything that would violate the sanctity of the concession contract or undermine any of its provisions.”
But Javellana said the CA with the concessionaires should be terminated, insisting that the agreement was “abused” and not followed to the letter.
“Nagkaroon din ng hindi tamang pagtupad at nagkaroon ng hindi tamang pagkolekta sa mga items of work, water infrastructure, at mga gastusin na hindi naman talaga prudently incurred kayat iyan ay hinihiling ng mga consumers na ripasuhin, ipakita ang malinaw na kwenta ng halaga ng mahal na tubig na isinusupply ng Maynilad at Manila Water at managot ang mga dapat papanagutin sa mga nangyaring abuso na iyan,” he said.
In a text message to The Manila Times, Javellana claimed that the CA was approved without consultation with consumers “who have to bear the brunt of huge income tax we pay while they’re on a tax holiday.”
“They did double charging. May CERA [currency exchange rate adjustment]na, may FCDA [foreign currency deposits adjustments]pang dinagdag. [Also] frontloading, advance billing, self dealing, pati mga foreign trips, flowers. May sweldo na sila, may management fees pa etc. etc.,” he said.
Another consumer advocacy group, Water for the People Network, estimated the pass-on-charges from the income taxes of Maynilad and Manila Water reached P15.5 billion from 2008 to 2012.
MWSS said it is reviewing the provisions of the concession agreement that allow the two companies to pass on to consumers their income taxes.
However, Javellana’s group has put the blame on Ramon Alikpala, former head of the National Water Resources Board (NWRB).
“Ang kasunduang CA ay isinubo na lamang sa ating mga water consumers. At malinaw naman sa CA na dapat ang mga proyekto ay Prudently Incurred at Tested for Efficacy.. pero ng maupo si Chairman Alikpala sa RO (Regional Office) as Financial Regulator 2002-2003 nawala ang annual audit at ng malipat siya sa NWRB as chairman ay binago niya ang definition through a [technical working group]na ‘di public utility ang mga concessionaires,” he explained.
Because of this, government auditors were barred from reviewing the concessionaires’ books of accounts.
Former Senate President Juan Ponce Enrile said Congress has no power to stop the concessionaires from passing on their corporate income taxes and other expenses to consumers if the contract between them and the MWSS allows it.
“I don’t know if Congress has the power to intervene, because it’s very clear that you cannot impair the obligation of contracts. Now, the only remedy here of the government would be to renegotiate the contract,” Enrile explained.
He pointed out that it is the government itself who entered into a contract with the water concessionaires, then it should be the MWSS that should convince Maynilad and Manila Water to renegotiate their contract.
Senator Ralph Recto earlier filed a resolution calling for an inquiry in connection with the revelation by WPN on the P15.3 billion combined corporate income taxes of Maynilad and Manila Water that were shouldered by their consumers.
Manila water is owned by the Ayala group while Maynilad is currently chaired by businessman Manuel Pangilinan.
But Enrile insisted that Congress cannot pass a law that could impair the obligation of the contract between parties.
“There is no need to investigate this if they [lawmakers]really believe this is an erroneous contract entered into by the MWSS then, they should now get their lawyers and study it, and then, file the case,” the former Senate chief explained.
Day in court
Despite Enrile’s stand, Bayan Muna Reps. Neri Colmenares and Carlos Zarate filed House Resolution 39 which tasks the Committee on Government Enterprises and Privatization to conduct an investigation on the irregularities of setting water rates by the MWSS Regulatory Office and the two water concessionaires.
The inquiry, Colmenares said, should reveal the total amount that the water concessionaires collected and paid for corporate taxes which could lead to refunding consumers or nullifying of the conces-sionaires contracts.