MWSS working out deal with Maynilad

The Metropolitan Waterworks and Sewerage System (MWSS) is now working out a compromise deal with Maynilad Water Services Inc. (MWSI) on the dispute regarding the approved water rates.

Public Works and Highways Secretary Simeon Datumanong, who is also MWSS board chairman, said talks are still ongoing on the "possibility of Maynilad continuing its franchise."

Another MWSS official, however, said yielding to Maynilad’s demand is definitely out of the question.

"We cannot just increase the water rates without basis. Our computations cannot be changed," said the MWSS official on condition of anonymity.

The official explained the MWSS regulatory board is independent from the government and that even President Arroyo cannot prevail over its decisions.

"We could work out some deal with MWSI but whatever it is the rate would not go higher than P26 (per cubic meter of water)," the official told The STAR.

Under its 2003 rate rebasing concession deal with the government, Maynilad is seeking a P33 per cubic meter rate increase starting January next year.

The MWSS, however, approved a lower rate of P26 per cubic meter which apparently sent Maynilad to return its 25-year franchise to the government.

Datumanong said they are still inviting Maynilad to two public hearings set on Tuesday and Thursday to thresh out any problems and work out a deal.

The Lopez-family controlled water concessionaire boycotted the last public hearing on Dec. 4 after MWSS had approved P26 as the new rate. Five days later, Maynilad decided to surrender its franchise.

"I hope they (Maynilad) will attend, if we could agree on something that they could still keep the franchise," Datumanong said.

Even if the dispute remains pending with an international arbitration committee, Datumanong said the MWSS will still remain open for dialogue with Maynilad.

The other water concessionaire, Manila Water Co. Inc. (MWCI) which services the eastern half of Metro Manila, will increase its rate as scheduled starting Jan. 1 with the required publication of a public notice expected today.

The concession agreement mandates that there should be a 15-day grace period before any rate increase is imposed.

Manila Water likewise was not granted its P25 rate rebasing petition from the current P9 and was only granted P17 per cubic meter.

Manila Water, however, recently announced that it will increase its rates on a staggered basis spread over the next three years. The decision was made during its own public hearings.

When asked if a similar staggered rate arrangement can be accommodated for Maynilad, MWSS said it might be possible but it should never go beyond the P26 approved rate.

The MWSS said Maynilad should now prove before the international arbitration panel that the government agency was at fault for the concession’s failure so it can collect as much as P17 billion.

The amount is guaranteed by the Philippine government under the 1997 concession agreement.

But if proven otherwise, Maynilad can only collect as much as P5 billion from the government.

"We cannot just change the computations just to accommodate MWSI, at least as far as I know it cannot be done," the MWSS official said.

The conflict in computation came after MWSS ruled that some factors included by Maynilad in its own computation should be excluded, resulting in a lower value rate.