As I See It

Maynilad, Manila Water evading the issues

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We received quick reactions from Maynilad and Manila Water on our July 9 column, which was based on a complaint for syndicated estafa filed in the Quezon City Prosecutor’s Office by a group of consumers alleging that the two water concessionaires have been collecting—and are still collecting—payments for the future construction of the Laiban Dam and the Angat Dam Irrigation Replacement Project.

The two projects, the complaint said, had already been cancelled and mothballed, respectively, but the two water firms continue to collect the advance payments. Finding the collections unwarranted, the Board of Directors of the Metropolitan Waterworks and Sewerage System ordered the two water firms to refund the collections to the consumers, but up to this date Maynilad and Manila Water are still collecting the advance payments from their customers. The collections now amount to P6 billion, and still rising, according to the complaint. Instead of them putting in the needed capital, the water concessionaires are not only making the public invest in future projects now, they are also keeping the P6 billion that does not belong to them, the complaint said.

In the two letters from the water distributors, which were published in the Letters to the Editor page last week, the two water concessionaires denied the allegations. Manila Water said I have been misled by the complainants. It said “tariff adjustments and collections are approved by the government after a very stringent process of evaluation and review.”

Maynilad said: “Contrary to claims that we engage in advance collections, we are actually required by the Philippine government to advance our investments so we can meet our service level obligations to our customers.”

Note that the statement said “advance our investments.” The government said advance their (the concessionaires’) investments. It did not say the public’s investments. It is not fair that the public be made to pay for what the water companies should be paying. The corporations should first invest in projects until they are completed, and from which they, the corporations, would derive profit. Only when they are already servicing the public from these projects do they have a right to collect from their customers.

To the allegation that on the first day they took over the distribution of water in Metro Manila from the MWSS, they were already earning from the water consumed by customers without them having to invest on a single foot of pipe, the two water firms cited the billions of pesos they have spent for rehabilitating the pipes and installing new ones.

My comment: That is true—later on. But that does not change the fact that on Day One that they took over, they were already beginning to earn because the water was flowing and the water meters were turning and at the end of the month they collected the fees for the water consumed. The water was provided to them by the government for free but they sold it to the consumers, and the pipes through which the water flowed were already in place.

Manila Water said it spent “a significant portion of its P50-billion capital investment program to replace the old and leaking pipes of the MWSS.”

Both concessionaires cited the “kilometers of pipes” they installed later on to service more customers.

Manila Water also said it has spent P6.6 billion for wastewater projects. Maynilad said it has spent over P48 billion to rehabilitate and modernize the water distribution system network.

My comment: That may all be true but they do not squarely answer the issues raised by the column: Did you or did you not collect advance fees from customers for the future construction of Laiban Dam and the Angat Dam Irrigation Replacement Project? Is it true or not that the Laiban Dam project has been cancelled and the irrigation project mothballed? Is it true that the total collection now amounts to P6 billion? Is it true that you are still collecting these fees in spite of the fact that the two water projects have been abandoned and mothballed? By collecting in advance the services for these projects before  they are completed, is that not tantamount to making the public invest in projects that you should instead invest in? Now that the two projects have been discontinued, is it not fair that you should not only stop collecting these fees but also refund the customers the P6 billion (and counting) that you have already collected? Did the MWSS order you or not to refund the amount to the customers?

Alas, the water firms did not meet these issues squarely. Instead, they engaged in extraneous issues. It is they who are trying to mislead the public.

On the MWSS order to refund the collections, Maynilad (but not Manila Water) replied that on “April 13, 2012, the MWSS issued a resolution deferring the implementation of their earlier resolution directing the MWSS Regulatory Office (RO) to issue a Cease and Desist Order to its concessionaires, with regard to their collected tariffs for the Laiban Dam and Angat Dam Irrigation Replacement projects.”

It is now the MWSS that must explain why it recalled that earlier order.

To the statement that the water concessionaires collect sewerage fees from customers although they do not provide sewerage services to them, Maynilad said: “We do not collect sewerage fees from customers who are not connected to our sewerage lines.” No comment from Manila Water.

Maynilad and Manila Water should not beat around the bush. Instead they should answer the question squarely: Did you collect, and are still collecting in advance from the public, fees for the construction of the Laiban Dam and the Angat Dam Irrigation Replacement Project even after these projects have been cancelled and mothballed, respectively?

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