Maynilad hits MWSS anew for delaying rate adjustment


Posted at Mar 02 2015 02:39 PM | Updated as of Mar 02 2015 10:39 PM

MANILA – Maynilad Water Services Inc. has expressed dismay over the alleged refusal of the Metropolitan Waterworks and Sewerage System (MWSS) to take action on the decision of an arbitration panel that ordered the immediate implementation of new rates.

In a statement, Maynilad said it is “suffering substantial damages” because of MWSS’s inaction.

Maynilad, the concessionaire and operator of MWSS’s West Zone Concession, said the rebased rate should have taken effect as early as January 1, 2013.

“Maynilad is completely puzzled and dismayed by MWSS Administrator Gerry Esquivel’s and Chief Regulator Joel Yu’s sudden about-face and refusal to keep their word and to honor the decision of the Arbitration Panel. This is after they repeatedly assured us that MWSS would respect the results of their own government-mandated arbitration process, regardless of whichever party won. That is why their refusal to honor the decision is totally shocking and completely unfair,” said Maynilad president Ricky Vargas.

Vargas said the MWSS will not implement the decision because the decision of another panel in their arbitration with Ayala-led Manila Water Company Inc. over their East Zone water rates may be decided in MWSS’s favor, which he said was not discussed earlier.

“Mr. Esquivel and Mr. Yu never once told us they would not honor the decision in our arbitration if another arbitration we are not involved in is decided differently. If they had told us that, we would never have agreed to go through with our own arbitration with MWSS. No sane party agrees to arbitration if the enforcement of the decision depends on the decision in another arbitration,” Vargas stressed.

Vargas also disputed MWSS’s claim that problems may result from enforcing two different rulings, saying “that was the inevitable result of MWSS's own decision to divide its franchise area into two zones with different facilities and economies operated by two independent Concessionaires.”

“So that is no excuse for them to violate their own Concession Agreement’s terms regarding the binding effect and finality of the arbitration decision and to betray their own assurances to us that they will respect the Panel's decision,” Vargas said.

“Even if the decisions in both arbitrations were identical, the rates of the two concessionaires would still be different. And they caused that by their own privatization structure and knew that from the very start,” he added.

According to the MWSS, it will not make water rate adjustments in Metro Manila until the arbitration process for Manila Water has been completed.

“We find it more prudent to wait for the conclusion of the arbitration with Manila Water before making any tariff adjustments because we don’t want any inconsistencies in the way we conduct our regulatory mandate as defined in the concession agreement,” Yu said in February.

The appeals panel ruled in favor of Maynilad, which means an additional P12.60 for users of 10 cubic meters per month; P50.40 for users of 20 cubic meters per month; and P79.80 for users of 30 cubic meters per month.

Maynilad earlier said it is willing to implement the increase on a three-year staggered basis “to mitigate the impact of the Award on its customers in the West Zone of Metro Manila subject to approval of the MWSS.”