MANILA -- A water supply shortage affecting tens of thousands in the capital is "real," distributor Manila Water told a congressional hearing on Monday, as one lawmaker raised the possibility that it could be part of a "destabilization" plot against the government.

"Wala pong conspiracy (There's no conspiracy). Our supply deficit is real," Manila Water President and CEO Ferdinand Dela Cruz said, replying to a question from Parañaque Rep. Gus Tambunting.

Metropolitan Waterworks and Sewerage System Administrator Reynaldo Velasco said there was "no truth" to the conspiracy yarn, which he described as "kathang isip (fiction)."

The crisis affects a total of 1.2 million households in the east zone of Metro Manila, serviced by Ayala-led Manila Water. The west zone, under Maynilad Water Services Inc, is unaffected.

"Lately, we have been receiving reports from social media that this is part of the destabilization plot to undermine the administration," said Quezon City Rep. Winston Castelo, whose committee convened the hearing.

"Recently there was a rice shortage. Today, we are now experiencing water crisis and there are news now that there will also be a power disruption on the part of Meralco," he added.

Castelo said his committee would "get to the bottom of the case, find out what happened and prevent it from recurring."

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Regulators have cited delay in some infrastructure projects and an El Niño phenomenon among factors that led to a drop in the level of Angat Dam, the emergency water source of Manila Water.

The concessionaire has restored 90 percent of its supply after a week of interruptions, a regulator said earlier Monday.

'ADVANCE FEES' FOR DELAYED FACILITY

Bagong Henerasyon party-list Rep. Bernadette Herrera-Dy said consumers were in effect "advancing payments" for a delayed water treatment plant, which has been blamed in part for the water crisis.

The Cardona treatment plant, which is supposed to generate 100 million liters per day from Laguna Lake, was in Manila Water's business plan since 2008, she said.

The facility was partially opened last March 14, 8 days after many taps in the capital's east zone went dry, she said.

Herrera-Dy asked the MWSS to confirm if the water concessionaire's business plans, which include future investments, were included in the computation of water rates.

"Isn’t it short of saying the customers are advancing payments for it?" she said.

MWSS Chief Regulator Patrick Ty confirmed this. "Yes. It is included," he said.

"Do you think it is following the concession agreement?" Herrera-Dy asked since the contract states that cash flow should refer to expenditures "prudently incurred." Ty said it formed part of the computation.

Ty, however, was unsure, prompting Herrera-Dy to berate him. He also could not also say how much was being charged for the said plant.