Maynilad Water Services Inc. (Maynilad) is poised to hike water rates as the Quezon City court upheld its petition for rate adjustment that it first sought two years ago.
Listed DMCI Holdings Inc. told the Philippine Stock Exchange on Thursday that in the August 30 resolution of the Regional Trial Court of Quezon City, it granted the Petition for Confirmation and Enforcement of Arbitral Award that Maynilad filed in July 2015 after Metropolitan Waterworks and Sewerage System and the MWSS Regulatory Office refused to implement the final award accorded on December 29, 2014 that was issued in an arbitration between Maynilad and MWSS.
“The final award upheld the 13.41 percent rebasing adjustment that Maynilad proposed for the fourth rate rebasing period, 1 January 2013 to 31 December 2017,” DMCI Holdings said.
Maynilad president Ramoncito Fernandez said the verdict “confirms that the concession agreement works, and restores investor confidence in the public-private partnership program of the government.”
He added that it also ensures the continued implementation of the company’s capital expenditure projects benefiting further their customers.
The DMCI explained that once the Quezon City court’s ruling becomes final and executory, Maynilad’s average basic charge would climb by 9.89 percent, representing the balance of the 13.41 percent rebasing adjustment, which is yet to be enforced.
The firm said this would translate to an average increase of P3.41 per cubic meter of the 2017 basic charge of P34.51/cu.m.
For a household with water consumption of at least 10 cu.m., this would translate to an increase of P11.56 in their monthly bill; and for 20 cu.m., P43.76 a month.
If and when implemented, the tariff raise would also bolster Maynilad’s claim against the Philippine government for an ongoing revenue shortfall in this respect, “as recently determined by a three-man arbitral tribunal that unanimously upheld Maynilad’s claim” against the administration.
In July, the international tribunal in Singapore ruled that Maynilad held the right to collect P3.424 billion in revenue losses against the government for the delay in implementing water rate adjustments.
Metro Pacific Investments Corp. (MPIC) informed the local bourse the tribunal ordered for the repayment of P3,424,690,000 for losses from March 11, 2015 to August 31, 2016, without impairing Maynilad’s right to seek recourse against MWSS for losses between January 1, 2013 and March 10, 2015.
Maynilad is a unit of the MPIC that services 17 cities and municipalities that comprise the West Zone of the Metropolitan Manila area.
Incorporated in 2006, the MPIC has undertakings in several segments including water, toll roads, power generation and distribution, healthcare services, light rail and logistics.
DMCI Holdings has a 25 percent interest in Maynilad through Maynilad Water Holding Company Inc., a consortium with Metro Pacific Investments Corporation and Marubeni Philippines Corp.