Next to watch out for: Price hike for water

By Fernan Marasigan, Business Mirror

Posted at Jan 25 2011 11:17 PM | Updated as of Jan 27 2011 08:36 AM

MANILA, Philippines - Besides transport fares and oil products, the price of water in Metro Manila and neighboring provinces will be next to rise with the “unjustified and unconscionable” adjustments expected to reach P3 per cubic meter, a legislator disclosed on Tuesday.

Party-list Rep. Bernadette Herrera-Dy of Bagong Henerasyon said the impending water-price adjustments had been approved without giving consumers direct access to information on the formula used by the Metropolitan Waterworks and Sewerage System-Regulatory Office (MWSS-RO).

“Public information and consultation are imperative requisites that the MWSS-RO, which supposedly serves as the protector of public interest, has totally denied us,” she said.

Dy also demanded a resolution of the legal questions surrounding the net-profit cap for the Maynilad Water Services Inc. (MWSI) and the Manila Water Co. (MWC). She believes that the two firms—one owned by the Ayalas and the other the Pangilinan Group—are not exempted from the net-profit cap law.

“I am positive that an independent auditor will insist on using the Rate of Return on Investment in determining water service cost rather than the MWSS-RO’s decision of using solely the Rate of Return on Rate Base [RORB] formula, wherein the 12% return computation includes all MWSS assets even before privatization,” she said.

She revealed that as of September 2010, the MWC reported net earnings of P2.975 billion, 31% higher than its 2009 net profit of P2.273 billion.

She said the private-water concessionaires must first refund consumers the billions of pesos they have collected for unimplemented water and sewerage-improvement projects. Among these projects are the P732-million Wawa Dam, the P5.4-billion Angat Water Reliability and the P45.3-billion Laiban Dam.

The neophyte legislator noted that the Commission on Audit has not been appointed to act as an independent auditor that will “determine the fairness, necessity and viability of petitions for water-rate increases.”

According to Dy, the MWSS-RO had junked her appeal to reject any water-rates adjustment petition filed by concessionaires Manila Water Corp. and Maynilad Water Services Inc.

“The new round of water-rates increases will again jolt Filipinos who are still reeling from the successive hikes in prices of prime commodities and basic services. The MWSS-RO must fully tell us whose side they are protecting.”