Manila Water ‘swindling’ consumers

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ALMOST two decades ago, the country began its march towards the privatization of public utilities. The first public utility to be privatized was water by virtue of the National Water Crisis Act of 1995.

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At a public auction two years later, two private bidders – the Ayala-led Manila Water and the then Lopez-led Maynilad Water—were awarded a 25-year concession by the Metropolitan Waterworks and Sewerage System (MWSS) to operate and maintain the water and sewerage system of the east zone and west zone of Metro Manila, respectively.

Although Manila Water and Maynilad, being mere concessionaires of MWSS, are supposed to be equally bound by the mandate of MWSS “to provide adequate, safe, reliable and affordable water services” to its consumers, it’s apparent such mandate is more honored in the breach than the observance.

Undeniably, the water privatization experiment has proved to be a disaster to consumers.

That’s because private water concessionaires do not exist for the benefit of the public but exist solely for profit.

Ordinary Filipinos are now paying a steep price for the concessionaires’ growing appetite for profit, with water rates at historic highs. On top of that, some concessionaires have even taken to “scamming” consumers to boost their bottom line.

For instance, rather than using its own funds, Manila Water collected P732-million from its customers for the development of the Wawa Dam in Rodriguez, Rizal. The Wawa Dam project was supposed to add 50 million liters per day to the water supply for its customers.

The project did not push through because of a dispute on the water rights to Wawa Dam, which was reportedly being claimed by another company.

Instead of returning the money to its customers, Manila Water realigned the funds to other so-called “service improvement projects” such as the Non-Revenue Water (NRW) Reduction project, which was supposedly aimed at increasing its water supply capacity and cushioning the effect of El Niño to its customers.

In our book, that’s clearly swindling. For example, if someone extracts money from you on the promise that he will repair your car but instead uses the money, without your consent, to repair his house, is that not swindling?

In fact, this kind of fraud is precisely what’s punished in the Revised Penal Code as “estafa” through abuse of confidence and deceit, which is done by misappropriating or converting the property (i.e. money) of another.

Some consumer advocates are also taking issue with another “estafa” perpetrated by Manila Water: the fraudulent misrepresentations made by the Ayala-led company to secure a “midnight extension” of its one-sided water concession agreement in the waning days of the Arroyo administration.

In exchange for government’s favorable endorsement for the extension of its concession agreement for another 15 years, Manila Water promised to implement an ambitious P450-billion investment plan. It also promised the MWSS board that its customers will no longer be subject to rate hikes for nearly a quarter of a century starting 2015. Manila Water’s communications head, Jeric Sevilla, was even quoted by media as saying that the company will only charge consumers an extra P1 for 2013 and 2014.

These “sweeteners” offered by Manila Water apparently convinced the MWSS board to approve in October 2009, the extension of the concession agreement until year 2037.

But like promises written in water, Manila Water never really intended to keep its part of the bargain.

Last June, the Ayala-led water concessionaire sought a whopping rate increase of P5.63 per cubic meter supposedly to fund future projects, among others.

So many folks are asking: What P450-billion investment was Manila Water talking about if it will ultimately (and unfairly) pass on the burden of funding their projects to their customers?

Expectedly, many sectors opposed the rate hike as unjustified saying that water concessionaries have been unfairly charging P15.3-billion worth of income taxes to their customers from 2008-2012. They also point out that the concessionaires have been billing consumers for unimplemented projects like the 20 percent environmental charge and other expenses totally unrelated to the actual delivery of water services.

There’s apparently some basis for the group’s claims.

In September 2013, the MWSS rejected Manila Water’s rate hike and instead ordered a 29.47 percent reduction in their basic charge for the next five years after the state agency found that water concessionaires incurred costs which were unreasonably expensive or worse, weren’t needed at all.

There’s no doubt the public is being taken for a ride by Manila Water to the tune of billions of pesos.

If PNoy is true to his “tuwid na daan” policy, he should either terminate Manila Water’s concession agreement for the latter’s fraudulent misrepresentations and broken promises, or at the very least, renegotiate the anti-consumer clauses inserted in the extension contract during the Arroyo administration.

The Filipino people don’t deserve to suffer for the next 23 years.

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2 Comments

  1. Of course its swindleing, but they know its ok, they can do it as who will do anything about it. You people deserve what you get. You allow it you deserve it. Ive complained about many things since i moved her from the uk, my wife doesnt like me complaining. But in my country we complain & then it gets sorted. It will never get sorted as long as you say nothing, so either do something about it or just shut up & put up with it.

  2. rodolfo l torrella on

    the ongoing connection of the north/south expressway and the traffic is all about the preparations for APEC meeting here,,, you peale did mention it before in “karambola” late last year or 2nd quarter of 2013
    thanks for updating us on the bad deals that this company is doing,

    salamat po