MANILA, Philippines - West Zone concessionaire Maynilad Water Services Inc. has won its arbitration case against the government over the losses it incurred from the delayed implementation of the tariff hike.
In a statement released yesterday, Maynilad said the three-man Arbitral Tribunal unanimously upheld the validity of Maynilad’s claim against the undertaking letter issued by the government to compensate Maynilad for the delayed implementation of its relevant tariffs for the rebasing period 2013 to 2017.
“It is very fresh. The members of the tribunal voted unanimously,” Maynilad president and chief executive officer Ramoncito Fernandez told The STAR over the phone.
The arbitration was conducted in Singapore before a three-man panel subject to the 1976 rules of arbitration of the United Nations Commission on International Trade Law.
The tribunal has ordered the Philippine government to reimburse Maynilad P3.4 billion for losses from March 2015 to August 2016, and ruled that Maynilad is entitled to recover its losses from September 2016 onwards.
“We will coordinate with the government. No details yet as to how and where (we will get it) But of course, we want it the soonest that is legally possible,” Fernandez said.
Fernandez, however, clarified that the P3.4 billion is just a partial award as the company claims it continues to lose revenues at an average of P200 million a month for further delay of the implementation of its alternative rate rebasing adjustment.
In case a disagreement on the amount of such losses arises, Maynilad may revert to the tribunal for further determination.
Last March 2015, Maynilad initiated arbitration proceedings against the government for refusing to compensate the company for losses incurred from the delayed implementation of its tariff increases.
This was because the Metropolitan Waterworks and Sewerage System (MWSS) did not act on the favorable award the company got for its 2013 to 2017 water tariff during end-2014, prompting Maynilad to file a new arbitration case against the government.
Fernandez welcomed the decision of the tribunal, saying it is an affirmation of the trust and confidence that Maynilad has placed in the concession agreement, and in its integrity, which has been responsible for the improved water and wastewater services in its concession area.
“We will continue to honor our commitments under the concession agreement and pursue the capital expenditure projects that will improve further the quality of service to our customers, as well as support the government’s initiative in ensuring the sustainability of our country’s water resources,” Fernandez said.
This year, Maynilad is spending P13.2 billion for its water and wastewater infrastructure projects.
Bulk or about P8.2 billion of this year’s capital expenditures will go to water infrastructure projects to ensure sufficient water supply and pressure in the West Zone.
The rest of this year’s capital outlay will go to water infrastructure projects as well as improvement works in its water treatment plants, construction and upgrade of pumping stations and reservoirs, laying of primary pipelines for water service expansion, and enhancement of common purpose facilities.
Maynilad is the largest private water concessionaire in the country in terms of customer base. It serves the areas of Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas, Malabon, and certain portions of Manila, Quezon City, Makati and Cavite.
The utility firm is is owned and managed by Maynilad Water Holdings Co. Inc., a joint venture between Metro Pacific Investments Corp., DMCI Holdings, and Marubeni Corp.