Water, water everywhere but not a drop to drink
FROM A DISTANCE - Carmen N. Pedrosa (The Philippine Star) - December 8, 2019 - 12:00am

This comes from “The Rime of the Ancient Mariner,” by Samuel Taylor Coleridge. The speaker, a sailor on a becalmed ship, is surrounded by salt water that he cannot drink. ...

But it is true with the Philippines today. Foreign countries are surprised when they see pictures of floods, rising water side by side with stories of no water for citizens use.

It did not happen during Duterte’s time but from the neglect of other governments before him. It is his misfortune that the problem reached crisis point during his tenure.

The Permanent Court of Arbitration in Singapore ordered the Philippine government to pay Manila Water P7.4 billion ($145 million) to recoup foregone revenues from rate increases that were rejected by regulators. Maynilad won a separate arbitration last year.

The two firms argued that the rate hikes were necessary to improve utility service coverage and water pressure in homes. The losses were aggravated by not allowing the two groups to raise their rates, they claimed.

As far as the public is concerned we need water efficiently delivered to our homes. That will not happen if the water companies and the government cannot agree to negotiations. A middle ground must be found.

The two firms argued that the rate hikes were necessary to improve utility service coverage and water pressure in homes.

“The arbitration award issued in our favor is for acts in breach of the procedure committed by officials of the previous administration, not the Duterte administration,” Manila Water said in a statement, adding that it was willing to cooperate with Duterte’s government. Manila Water serves seven million customers through a concession valid until 2037.

Maynilad caters to nine million customers.

The contracts were made during earlier administrations and were based more on politics than on providing public service efficiently. The private sector basically saved Metro Manila from the water crisis, but problems seem to have caught up with them this year.

It is my personal view that public services are better privatized if governments are corrupt and inefficient.

To understand the intricacies of the issue, we go all the way back to the ‘90s, when the government handled water badly.

In the mid-1990s under the Ramos administration, Metro Manila had rotational water shortages. The Metropolitan Waterworks and Sewerage System (MWSS) simply could not keep up with the demand of an overpopulated Metro Manila.

The MWSS was only able to cover less than 70 percent of the entire Metro Manila. Non-revenue water or the volume of water lost due to leakages was very high. Supply was intermittent and lasted less than 16 hours a day.

Then-president Fidel Ramos believed that privatization of the MWSS was the best way to improve services and at the same time ease pressure on the government to handle the daunting task.

With all these problems, Ramos eventually signed Republic Act No. 8041 or the National Water Crisis Act.

The legislation paved the way for the private sector to come in and take over the construction and operations of water utilities.

To me, businesses  which seek profits from public service industries is a contradiction. But they do with an optimistic view that it does not have to sell to make money. It makes money because it is a necessity unless someone invents how to make water.

Duterte ordered new water concessions contracts will file  charges against ‘all those involved’ in the concession agreements with Manila Water and Maynilad, claiming the deals are studded with provisions that harm Filipinos.

Through cash analysis, the government will look whether the water concessionaires were over-accumulating profits and losses. Rates would be adjusted upward once every 5 years.

The concession agreements were supposed to end by 2022, but were extended by the Arroyo administration to 2037.

These allegations eventually led to a conflict between the companies and had to seek international arbitration in Singapore.

Manila Water won their case against the government in a case it filed with the arbitration court over the non-implementation of water rate hikes starting in 2015. It’s because of this ruling that the Duterte government is being ordered to pay P7.39 billion.

Duterte also ordered the filing of criminal, civil, and administrative charges against “all those involved” in the concession agreements of Manila Water and Maynilad with the Metropolitan Waterworks and Sewerage System (MWSS), a government corporation.

The charges would cover the owners of the water concessionaires, their “agents,” and even government lawyers who helped craft the deals.

Can Duterte just cancel existing agreements? The Manila Water and Maynilad concession agreements are valid until 2037. They were originally 25-year agreements signed in 1997, during the Fidel Ramos administration.

But in 2009, 13 years before they were set to expire in 2022, the deals were extended for another 15 years.

According to Malacañang, Duterte is empowered to cancel these deals because Manila Water and Maynilad have “abused” their arrangement with government and are treating it as a “money-making venture.”

The President, took issue against two of the biggest names in Philippine business – the Ayalas and tycoon Manny V. Pangilinan.

The Ayala Corp. counts Manila Water as its subsidiary while Pangilinan’s Metro Pacific Investments Corp. own a controlling stake in Maynilad Water Services.

The Department of Justice has been reviewing the concession agreements, concluding that a dozen of its provisions are onerous and put the consuming public and government at a disadvantage.

The court ruled that the government must pay Manila Water P7.39 billion for losses it incurred when the government stopped the concessionaire from raising water rates starting in 2015, during the administration of Benigno Aquino III.

It  is not only the Philippines that resorted to privatisation of public services.

“By the end of the 1980s, sales of state enterprises worldwide had reached a total of over $185 billion – with no signs of a slowdown. In 1990 alone, the world’s governments sold off $25 billion in state-owned enterprises – with continents vying to see who could claim the privatization title. The largest single sale occurred in Britain, where investors paid over $10 billion for 12 regional electricity companies. New Zealand sold more than 7 state-owned companies, including the government’s telecommunications company and printing office, for a price that topped $3 billion.”

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