‘Fair and consistent practice’—Maynilad
This is in response to Neal H. Cruz’s column titled “Water, power firms overcharging the public” (Inquirer, 2/25/13).
From 2007 to 2012, Maynilad Water Services Inc. (Maynilad) spent P37.82 billion to improve and expand water services in our concession area. This enabled us to recover and sell more water to more customers, and to earn a total net income of P23.51 billion during the period.
Obviously, we are not earning excessive profits and we are not collecting in advance the capital we need from our customers. Otherwise, our profits will be greater than our investments. We are able to sustain our massive capital spending because we have existing bank loans to augment our internally generated funds.
As for claims that we have been raising our water rates with impunity, beyond the reach of poor consumers, these cannot be farther from the truth.
Under our concession agreement with the government, we can make only three regular adjustments on our basic rate: 1) every year for inflation, 2) every quarter for foreign exchange fluctuations, and 3) every five years to partially recover both our investments and profits from these investments.
In the last five years, our total investments grew by 788 percent compared to the P4.26 billion that was spent from 2002 to 2006. If we go by the logic that our investments should be charged to our customers once they derive benefits from these investments, then our water rate should have also increased by over 700 percent.
And yet, our average tariff in the last five years only increased by 37 percent, from P32.85 per cubic meter in 2007 to P45.04 in 2012.
Furthermore, our low-income customers (lifeline) pay only P10.67 per cubic meter, which is significantly lower than the rates being charged by private water operators and illegal vendors. The fact that unserved residents in Caloocan, Parañaque and Cavite clamor for a Maynilad service connection is even stronger proof that our water rates are affordable.
We have always conducted our business in a manner that is fair to our customers and consistent with our contractual agreement with the government. While we continue to receive false, malicious and baseless accusations, we remain firm in our commitment to provide clean, reliable and affordable water solutions to our customers.
—CHERUBIM G. OCAMPO-MOJICA
head, Corporate Communications
Maynilad Water Services Inc.
