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Consumers ‘subsidize’ water firms

P15 billion pass-on tax in 5 years Various groups and lawmakers on Wednesday slammed water concessionaires Maynilad and Manila Water for allegedly passing on their income taxes, employee salaries and operating expenses to consumers worth billions of pesos. The Water for the People Network said Maynilad and Manila Water had passed on to consumers a total of P15 billion in the past five years, not to mention the billions more that they also passed on each time they lost as a result of foreign exchange fluctuations. The Water for All Refund Movement said the two concessionaires had also saved P7.2 billion so far from their tax exemptions. Senator Ralph Recto said he will file a resolution calling for a Senate inquiry into Maynilad and Manila Water, even as Reps. Luzviminda Ilagan and Emmi de Jesus denounced the concessionaires’ proposal to increase their water rates. Bayan Muna Rep. Neri Colmenares said the water concessionaires should refund the billions they collected from the public for still unimplemented water projects. Manila Water did not return calls when asked to comment. Maynilad spokeswoman Bim Mojica said the Manila Waterworks and Sewerage System would be the appropriate entity to ask to explain since it was the government agency that crafted the 1997 concession providing for the recovery of business-related taxes by the concessionaires. “They [the government] made this decision even before the water concessionaires bid for and won the contracts to supply water and wastewater services in Metropolitan Manila,” Mojica said. Bayan Muna and Partido ng Manggagawa demanded an immediate refund, while the Bagong Alyansang Makabayan wanted President Benigno Aquino III to stop the “immoral practice.” Bayan secretary general Renato Reyes said the President must have been turning a blind eye on the irregular practice considering that two of his men—Public Works Secretary Rogelio Singson and Cabinet Secretary Jose Almendras—were former presidents of Maynilad Water and Manila Water, respectively. Water for the People’s Network lead convenor Sonny Africa said the MWSS allowed the “pass on” privilege because it was part of its agreement with the concessionaires since 1997, when the two firms were privatized. Asked where in the water billing statement the operating expenses and income taxes were reflected, Africa said those could not be found in the billing statements. “The income taxes, salaries, maintenance and opex are not reflected in the billing statements because these are incorporated in the water cost, or in the P38 per cubic meter of Manila Water and in the P48 a cubic meter of Maynilad,” Africa told the Manila Standard. He said his network discovered the scheme when they scrutinized the two private firms’ business plans. Recto said that, if true, the concessionaires practice of passing on their costs to consumers was immoral and unethical. Africa said the two water firms had been passing on P3.1 billion to consumers annually, with Manila Water collecting P1.5 billion and Maynilad P1.6 billion since 2008. “It is like having their cake and eating it, too,” said Colmenares who vowed to have the pass on provision investigated and revoked by Congress. Meanwhile, the Quezon City Prosecutor’s Office has dumped the syndicated estafa case filed by a consumer group against Manila Water and Maynilad over their alleged collection of P6 billion that was supposed to finance water supply projects. The agency said the two concessionaires could not be charged for estafa because they did not obtain that amount through fraud.With  Macon Ramos-Araneta, Rio N. Araja and Maricel V. Cruz
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