Maynilad rate hike looms

MANILA, Philippines —  Consumers of west zone concessionaire Maynilad Water Services Inc.  are expected to see an increase in their billings after the company earned a favorable ruling from a local court.

Maynilad scored a major victory in its arbitration case after the Quezon City Regional Trial Court granted the company’s petition for confirmation and enforcement of its arbitral award.

The case stemmed from the refusal of the Metropolitan Waterworks and Sewerage System  and the MWSS Regulatory Office to implement the final award which upheld the 13.41 percent rebasing adjustment that Maynilad proposed for its fourth rate rebasing period covering 2013 to 2017.

Once the court orders the immediate implementation, Maynilad’s average basic charge would increase by 9.89 percent, representing the balance of the 13.41 percent rebasing adjustment that has yet to be implemented.

This will translate to an average increase of P3.41 per cubic meter of the 2017 average basic charge of P34.51 per cu.m.

Maynilad customers consuming an average of 10 cu.m. or less every month will have to pay an additional P11.56 per month while those consuming 20 cu.m. will have a P43.76 increase in their water bills.

The rate hike, however, is still appealable by MWSS.

MWSS could not be reached for comment on the matter.

“The decision confirms that the concession agreement works, and restores investor confidence in the public-private partnership program of the government. This also ensures the continued implementation of Maynilad’s capital expenditure projects that are intended to benefit further our customers,” Maynilad president Ramoncito Fernandez said.

“If and when implemented, the tariff increase would also ameliorate our claim against the Philippines 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 country,” he added.

Maynilad won its arbitration case against the government over the losses it incurred from the delayed implementation of the tariff hike.

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.

However, 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.

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 owned and managed by Maynilad Water Holdings Co. Inc., a joint venture between Metro Pacific Investments Corp., DMCI Holdings, and Marubeni Corp.