The privatization of the MWSS

"The oligarchs simply used their saliva and their influence to drown us by charging us for every drop of water."


Part II

To ensure that the government would be locked in to their onerous demands to increase the price of water per cubic meter, to charge customers for the foreign currency differential adjustment and for environmental and service maintenance charges, the two water concessionaires sought to submit issues pertaining to the concession contact to the International Arbitration Centre IAC. Any decision by the IAC will be binding.

That decision to submit the dispute to the IAC automatically gave the two concessionaires a 50-percent edge, notwithstanding that the Philippines lost an important element of its sovereign right to decide matters affecting the welfare and health of our people. Sonny Africa of IBON International hit the nail on the head when he asked what then would be the role of the National Water Resources Board when all matters pertaining to the utilization and disposition of our water resources would be decided by the IAC. Can the right preclude the Supreme Court from deciding a case?

President Rodrigo Duterte said, rather harshly, they should either they shape up or ship out, the two concessionaires would dare not defy him. Manila Water and Maynilad Water, together with the consenting agency, the MWSS, are guilty of making the country a party to a self-serving international organization without the approval of Congress, considering that the Philippines would be denied of its inherent and sovereign right to decide issues like taxation without its consent.

With shameless arrogance, the two concessionaires argued that they are not public utilities, without even thinking that almost 90 percent of the actual functions and duties of MWSS were just shifted to them as a result of the decision of the Ramos administration to privatize MWSS.

The mere use of the word “concessionaires” or “concession” does not change the nature of the industry as a public utility engaged in the distribution of water. As a public utility, the consuming public have no choice but to cater to them regardless of whether they could afford it or not. That is the essence why it is called a public utility.

The two concessionaires demanded that they be allowed to pass on to their customers the payment of income tax despite the fact that water rate had almost increased by 1000 percent beginning at P2.50 per cubic meter in 1997. The two water companies argued as though the people were inside philosophy class 101, saying that the Regulatory Office, referring to the NWRB, shall consider and treat the concessionaires as mere agents and the contractors and MWSS still and remains to be the public utility.

They forgot that the two water concessionaires got their concession using whatever investment that poured in to improve and widen their distribution system the soonest possible time using the very payment made by their captive customers as rolling capital. In carrying out this assignment to improve and widen the water distribution system as mandated by R.A. No. 8041 or “The Water Crisis Act,” they purposely defanged the MWSS to merely overseeing the operations and rate increases the two water utilities wish to implement.

If only the two water concessionaires would publicly disclose the cost of the acquisition of the franchise, and declare the yearly income they earned, one need not even be an accountant to know how fast they recovered their investment. Some would even venture to say they did not truly put up a huge amount of investment because areas with no water facilities were made to pay for the piping and installation of valves and water meter that will be charged from them once water starts to flow into their area.

In an article, it says the two concessionaires accomplished what MWSS accomplished in so short a time. Less than 70 percent of the areas covered by their franchise have access to water. In just a few years, the two managed to extend their water service to more than 90 percent of the combined service areas, encompassing a population of more than 14 million people. However, many contend that service of potable water came at a very high price.

It was double whammy, for aside from the charge collected from every household seeking the rehabilitation of their water system in subdivisions that seek to have connection with Manila Water, they are charged an average ranging from P10.00 to 16.00, inclusive of guaranty deposit. The huge amount collected by Manila Water is according to them will be used to pay the contractor, not MWSS, whom they hired to work for the pipe-laying and installation of valves in the area.

The people in the covered areas have no choice. It was in a situation of choosing between the devil and the deep blue sea that allowed them to generate funds to fast-track everything. The people were forced to bear the cost of what really should be burden of the concessionaires. The drawback is that they expanded fast but little allowance to sustain their supply, creating a serious problem of acute water shortage.

Given that explanation, the expansion in the areas covered by the concessionaires increased their monthly water collection, not by virtue of their investment, but from their own customers who have no choice but to buy water from them. In that, one could say that public service as a duty is completely absent in them.

On their monthly collection, the concessionaires enjoy, every now and then, increase in water rates with little or no oppositor. Because of that, they were able to recoup much of their investment in the soonest possible time. Whatever improvements made in their franchise areas are charged from customers particularly in the case of Manila Water.

Aside from forcing their customers to share what they were mandated to do, they applied many tricks to circumvent that. First, they demanded price increase as often as they can which means they could easily toss the burden to their customers. Gone are the days when people would have access to free water as what former President Magsaysay promoted by his building of artesian wells in the city.

Second, the loans used to augment their investment were guaranteed in the form of foreign currency differential adjustment. This means every time the peso devalues against the dollar, the difference will be charged from the captive customers, of which their consent was not asked. Even their role as concessionaires was passed on, like fees for environmental and service maintenance charges.

Third, they abolished the socialized pricing scheme which is to offer at lower rate water in depressed areas. They even prohibited the use of artesian wells built inside private properties and at a cost to the property owner.

The oligarchs simply used their saliva and their influence to drown us by charging us for every drop of water. This explains why the two concessionaires were jittery because the President knows what he is talking about; that he can revoke the concession for their failure to comply their part of the contract.

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Topics: Rod Kapunan , MWSS , water , International Arbitration Centre
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