Maynilad, Manila Water, follow Meralco’s exampleBy Neal H. Cruz |Philippine Daily Inquirer
Any way you look at it, the increases in water rates by the two water concessionaires, Maynilad and Manila Water, are too much and unconscionable. Imagine, Maynilad is increasing its rates by P8.25 per cubic meter, and Manila Water slightly lower. To the average household, that would be an increase of P250 a month. That’s highway robbery! Many poor families earn less or only slightly more than that.
Remember, the water that the concessionaires sell is supplied to them free by the Metropolitan Waterworks and Sewerage System (MWSS). They sell this free water at a profit to customers through pipes already installed by the MWSS. All they have to do is collect the monthly bills. That’s what we call in Filipino “tubong lugaw” (easy profit). What better deal can you ask than that?
But here are these two water utilities asking for another increase just because the concession agreement allows an increase every five years. But why such a huge increase? That is greed, pure and simple.
The two concessionaires claim they need capital for projects to supply more water to Metro Manila. But why get that capital from the people? Capital is supposed to be supplied by the firms. That’s why it is called “capital.”
The two firms are collecting in advance charges for water that they have yet to supply to their customers. Then when the water comes flowing, they will charge the customers again for water consumed. That’s double charging.
Take, for example, the Laiban Dam project. The two firms have already collected additional fees from their customers, allegedly to finance the construction of the dam. But then they aborted the project, so what happens to the Laiban Dam funds collected from the customers? By all rights, they should refund the collected funds. In fact, a group of water consumers is asking them to do just that. But the two firms refuse to return the people’s money.
And after keeping the money that does not belong to them but to the consumers, they want to squeeze consumers more by raising water rates. Is there no end to their greed?
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The law requires public consultations before any increase. So the two firms went through the motions of conducting consultations but closed the gates of the MWSS—where the consultations were supposed to be held—and refused to let the public in. Maybe the firms had packed the place with their own people so that there would be no opposition to the increases. People asked to be let in to attend the “consultations” but the guards prevented them from coming in and so there was a little violence when the angry people tried to push their way in.
We have regulatory bodies to see to it that water and electricity rates and road tolls are fair, but they are nothing more than puppets. All the increases asked by the concessionaires are granted by the regulatory bodies almost without fail, even when the increases are too much—as in the instant case with the water rates.
The regulatory bodies are supposed to be independent, looking after the welfare of the public. But how can they be independent when their salaries come from the concessionaires? If the latter don’t pay, the members of the regulatory bodies get no pay. The concessionaires have got them over a barrel.
Obviously, the system has to be changed. Let’s see how fast the new senators and congressmen can craft the necessary legislation.
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This is not to condone the increase in power rates, but Maynilad and Manila Water can learn from Meralco on how to soften the blow to customers. The strategy involves Meralco talking to its customers directly (unlike Maynilad and Manila Water refusing to let the public participate in their “public consultations”) while using a softer, gentler approach to explain complicated pricing adjustments and other power-related information.
Meralco’s new radio and television advisories provide customers a monthly update on the power industry, rate adjustments and new products and service information in a simple, easy to understand manner. Their 30-second to one-minute announcements are coupled with public service tips and other easy-to-understand ideas on how to save on your monthly electricity consumption. Over the past several months, Meralco has been holding focus group discussions (FGDs) with its customers, asking residential and corporate customers what they think of the utility (I personally think it is profit-hungry when it should have more compassion for its customers) and how they want it to address their needs.
The survey results showed that a majority of Meralco customers do not totally understand their bills and pricing structures, and they are largely clueless on how to best manage their monthly electric consumption. The latter was found to be a prime concern for customers as they felt powerless in the face of rising electricity costs.
Customers involved in the FGDs indicated that they prefer Meralco to directly explain to them the components of their monthly electric bill and the reasons for the hikes in their monthly bill. Customers also demanded that Meralco provide helpful tips on how to save on electricity, minus too much technical jargon.
Price increases happen because of increases in generation charges and price fluctuations triggered by the power producers from whom Meralco sources electricity for distribution to its consumers. (That’s according to Meralco.) This appears to be a first in communication and it seems Meralco is the only utility in the world that has done it so far—all in the spirit of customer satisfaction.
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