Disapproval of water rate increases a welcome relief for Metro Manila

The Freedom from Debt Coalition today hailed the Metropolitan Waterworks and Sewerage System’s recent decision to disallow any water rate increases for the entire year of 2009 as a welcome relief for Metro Manila’s 12 million residents now facing the initial tremors of a global economic crisis.

Citing statements made by MWSS Administrator Diosdado Allado, FDC characterized the decision as a long-awaited recognition by the MWSS of the “insensitivity” of any possible rate increase to “the plight of Filipinos”.

Last Wednesday, Allado announced the decision of MWSS, stating that, “We are all called upon to make sacrifices and show our patriotism in some way and we ask our concessionaires to show the same.”

FDC said that the rate hikes proposed by Manila Water and Maynilad would have been a very heavy burden to many of the Metro Manila households, had they been approved.

Word of caution

FDC, however, cautioned that the crisis should not be exploited to railroad old proposals to extend the concession contracts or to grant further allowances to the two concessionaires without closely examining other alternative solutions that may be explored.

According to FDC, current proposals and negotiations to extend the concession contracts of the two concessionaires are being held behind closed doors. They stated that details of any proposals between the concessionaires and MWSS should be revealed and that these be approached with the interests of the consumers in mind.

They stressed that MWSS should step up efforts to include civil society groups and consumers in determining the next steps to be undertaken in ensuring that the water needs of Metro Manila consumers will be adequately met.

Necessary first step

FDC Vice-President Edwin Chavez stated that the disapproval of any proposed increases in Metro Manila water rates is the necessary first step not only in mitigating the impact of the global crisis on the basic water needs of Metro Manila consumers. It is the first step as well in reviewing the actual privatization scheme implemented since 1997.

“This is an opportune time for us to look back on past rate increases and the actual performance and project expenditures of the two concessionaires which have always been used to justify the numerous rate increases implemented since 1997”, said Chavez.

“We hope that MWSS’ recent disapproval of the proposed rate increases will be but the first indicator of a renewed MWSS asserting its role and authority in protecting consumer interests.” said Chavez.

Maynilad to Increase Tariff by Jan 1’09: Gandang Pamasko at Salubong sa Bagong Taon ng mga Hayupak!

Below is a statement prepared by Freedom from Debt Coalition (FDC) opposing new tariff increase by Maynilad. Aba’y wala tayong kamuwang-muwang na magtataas pala ng singil ang mga damuho ng halos 12 pesos kada cub

ic meter. Matindi. sa gitna ng krisis e tubo na katakot-takot pa rin ang

iniisip ng mga damuho.  kagandang pamasko at pasalubong sa bagong taon ng mga hinayupak na are. pumapayag kasi tayo sa privatization. ayan ang napapala natin.  Sana maraming consumers ang tumutol dito.

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FDC: No tariff increase for Maynilad

The Freedom from Debt Coalition opposes the unconscionable rate hike being peddled by Maynilad Water Services, and condemns as insensitive Maynilad’s profit-oriented attempt to proceed with business as usual in the midst of a financial crisis that has left the poor extremely vulnerable to the slightest rate increase in basic necessities such as oil, power, and water. The proposed rate adjustment is part of the rate rebasing exercise, a scheduled business mechanism done once every five years that paves the way for large rate hikes based on new business plans proposed by water concessionaires to the Metropolitan Waterworks and Sewerage System – Regulatory Office (MWSS-RO). In its “public consultation” held last Friday, Maynilad presented an increase of P 7.10 in the basic tariff for households consuming 30 cubic meters a month.

The cited amount, however, is misleading and does not fully present the impact of this proposed increase. If Maynilad gets its way and the proposed increase is approved, VAT, environmental and sewerage charges, which are all based on the basic tariff charge, will also go up. Households connected to Maynilad’s sewer lines will experience an increase of at least P11.93 per cubic meter. Those without sewer services will take on an increase of P8.75. In the final equation, the average household’s monthly bill will go up by P262-P357. With 86% of Maynilad’s consumers composed of residential connections, 20% of which belong to depressed communities, Maynilad’s proposed rate increase cannot be taken lightly. For several years Maynilad has enjoyed tax holiday incentives from the Bureau on Investments and until now continues its attempt to retain this incentive. In the absence of this tax holiday, Maynilad insists that it is not precluded from having its consumers shoulder Maynilad’s corporate taxes.

FDC believes it is only right that Maynilad reveal a breakdown of their proposed rate hike to publicly show how much of what is to be paid will actually go to the payment of corporate taxes, to the payment of MWSS loans and loan interests, and to the actual projects that they are proposing to undertake. From the P7.10 increase, how much will go to Maynilad’s coffers as revenue? How much of the proposed increase will be allocated to corporate perks for Maynilad’s executives? These items must all be properly laid down in any consultation that purports to seek public approval for a rate increase. The people’s right to refuse paying for unnecessary extravagances must be recognized. We should know what we are actually paying for. Without such transparency in the rate proposal, the public consultation being held will amount to nothing more than a procedural farce. Maynilad’s current rates are already being disputed as over-priced, thereby placing in doubt any moral ground to demand further increases.

A civil case filed by civil society groups questioning Maynilad’s rate hike of January 2005 still remains pending until today thanks to Maynilad’s stubborn refusal to submit its rates under the jurisdiction of the National Water Resources Board, the only water regulatory body with quasi-judicial functions to look into water rates for consumer interests. To this day, the question of whether or not we are paying too much still remains unanswered. It is therefore sheer temerity on Maynilad’s part to demand a rate hike it does not deserve. Maynilad is nowhere near the service targets it submitted in 1997 and still owes the MWSS at least $36.9 Million in unpaid concession fees, not inclusive of a disputed $18.1 Million also claimed by MWSS as additional concession fees. These fees, which should have rightly been paid years ago, have been permitted to be restructured so as to give Maynilad’s new management more room to breathe. Are we to understand then that while the government willingly bailed out Maynilad when it was in dire financial straits, that same government will now stand idly by as Maynilad demands a rate hike that the poor cannot afford? Where is the government in all this? Government itself has also come to earn revenues from Maynilad’s consumers, and continues to insist that Metro Manila consumers should shoulder all the expenses of water provision. It has already collected more than P1.6 B in VAT revenues from Maynilad’s consumers in the years 2006 and 2007. More has been collected in prior years.

As senate debates the allocation of taxes collected from the people, FDC calls on them to reconsider the moral propriety of refusing to allocate people’s taxes to something as basic as water provision. Maynilad’s proposed water rate increase must be opposed. The welfare of millions of consumers in more than 600,000 household connections in Maynilad’s west zone must be protected from the non-transparent profit mechanisms employed by Maynilad.

FDC refuses to wait until disconnections are imposed on 150,000 destitute households that cannot afford the rate hike. We call on government to do the same.

10 years of Privatization of Water Services in the Philippines

Heto naman ang position paper ng Freedom from Debt Coalition (FDC) sa epekto ng privatization at panawagan para i review ang batas na nag privatize ng MWSS.

We presented this during the Committee Hearing of the House Committee on Natural Resources, headed by Iggy Arroyo (aka Jose Pidal) in reaction to the Privilege Speech of Cong. Risa Hontiveros Baraquel of Akbayan Partylist on Right to Water. During the first hearing ay absent ang MWSS. Si Cong Villafuerte ay “hot” sa Maynilad at inuungkat ang papel at pakinabang ng dating may ari ng Maynilad read: Lopezes.

After 10 years ng privatization ng MWSS, walang nasunod sa mga pangako ng privatization at kasunduan na tutuparin sana ng mga malalaking kumpanyang naghati sa pagdeliver ng tubig sa halos 10 milyong residente ng Metro Manila.

Palpak na ang privatization sa Metro Manila, gusto pa nilang palaganapin sa buong Pilipinas. Wawa naman tayo.  Bakit palpak? pakibasa na lang po ng position paper. At sana ay dumami ang mga nagtutulong tulong upang huwag nang lumaganap pa ang privatization sa pagdeliver ng mga serbisyong tulad ng tubig para mas maging accessible sa lahat. on the first place, trabaho ng gobyerno na i provide ang ganitong essential services. Pag patuloy na napasakamay ng mga malalaking korporasyon ang negosyo ng paghahatid ng tubig, baka mamatay na sa uhaw ang mga pinoy dahil sa taas ng presyo.

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ON THE 10 YEARS OF MWSS PRIVATIZATION

Position Paper presented to the Committee on Natural Resources
House of Representatives, 14th Congress

Freedom from Debt Coalition
August 13, 2008

The Freedom from Debt Coalition (FDC) urges the honorable members of the House of Representatives’ Committee on Natural Resources to conduct a thorough review and investigation of the Metro Manila Waterworks and Sewerage System (MWSS) privatization, believing firmly that for the past ten years, impacts of the said privatization thus far run counter to the aims set forth in RA 8041 to “address the nationwide water crisis which adversely affects the health and well-being of the population, food production and industrialization process” and in turn defeats the people’s right to water.