Maynilad seeks govt help in legal row with MWSS

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Maynilad Water Services, which is controlled by the Manuel V. Pangilinan led-Metro Pacific Investments, on Wednesday urged the government to intervene in its legal dispute with Metropolitan Waterworks and Sewerage System (MWSS) over water rate adjustment.

Randy Estrellado, Maynilad’s chief finance officer, warned that MWSS’ continued hard stance puts the country at risk.

“We have a runaway regulator and the national government must step in to correct the situation,” he said.

Maynilad made the statement after MWSS earlier announced that it will not implement an arbitral award that it was given recently.


Estrellado cited Section 12.5 of their concession agreement with MWSS, saying the latter’s move to adjust water rate is “again another clear proof that the regulator does not honor its contract.”

He pointed out that MWSS’ way of routinely ignoring and reinterpreting its contract with the firm has put at risk the country’s economic, investment and job-creation programs.

Estrellado said when “government officials seek new foreign investments, they will have to explain why a valid contract and a final and binding arbitral award were not respected by a government agency.”

When a foreign investor decides not to invest because of this risk, he said, job generation, among other things, suffers.

He cited the arbitral award, saying it is final and binding, and the government itself waived its right to appeal.

“The rule of law must prevail, not the whim of a few persons. It was on a whim that this present issue on water rates started, with our contract being questioned and reinterpreted 17 years following its signing, and after we have fulfilled the MWSS mandate to improve the delivery of water services in the West Zone. It must end with respect for the law and contracts,” Estrellado said.

Instead of implementing the arbitral award, MWSS just directed Maynilad to increase its rate by only 64 centavos per cubic meter (cu. m.), instead of P4.06/cu.m., foregoing the corporate income tax component.

According to the arbitral award, the rate is allowed under the agreement drafted and signed by the government.

The arbitral award earlier said it is normal business practice to include in the price of products and services the taxes the company will pay to remain in the business.

Maynilad has taken the Philippine government to another arbitration panel in Singapore because of the MWSS’ refusal to implement rate adjustments as ordered by the arbitration panel.

Maynilad claimed that it has lost P3.4 billion from January 1, 2013 to February 28, 2015.
The West Zone concessionaire earlier won an arbitration case against the government for an average P3.06/cu.m. rate increase.

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1 Comment

  1. apolonio reyes on

    Bakit kaya ang Maynilad spo ang lakas ng loob magsabi sa radio at tv na idudulog nila sa malacanang ang decision ng MWSS kung hindi papasunurin ng MWSS na isali nila income tax nila sa kanilang gastos? Sino ang pinagmamalaki at tangan nila sa malacanang at ganito ang lakas ng loob ng Maynilad na labanan ang MWSS?