PARTY-LIST Rep. Neri Colmenares of Bayan Muna has accused two water concessionaires of plotting to collect their so-called foreign- exchange losses from millions of consumers through an increase in tariffs on January 5.
Colmenares said the threat to inflict higher rates for a commodity that is universally and naturally available comes in the heels of the doubling of fares for the Light Rail Transit Lines 1 and 2, and the Metro Rail Transit Line 3 systems by January 4.
The lawmaker slammed these increases and wondered if the Aquino administration would also impose higher electricity rates and additional taxes aside from raising the rates for bureaucratic services.
Colmenares said the water firms apparently sensed that it must go along with the fare increases to be imposed by the Department of Transportation and Communications.
Both increases would affect the 14 million residents of the National Capital Region and transients who work in the metropolitan area.
Colmenares feared that, as Aquino becomes a lameduck, higher water, electricity tariffs and more taxes would be approved to benefit big business firms that supported the regime.
The legislator said the proposed water-rate hike that calls for an increase in foreign-currency differential adjustment (FCDA) essentially frees the two water concessionaires from absorbing foreign-exchange losses that consumers are not responsible for.
“In other businesses, they are the ones who absorb bad business decisions, like FCDA, and pay their own taxes, but these water concessionaires are raking in billions by fooling us. They even pass to consumers losses due to changes in foreign-exchange rates. But, in this case, the concessionaires borrow from foreign creditors without any qualm, knowing that they are insulated from the risk ordinary borrowers take because they’re allowed to pass on their forex losses to their consumers. It is like having their cake and eating it, too. Sa kuryente nga e nagrereklamo tayo sa paniningil sa atin ng systems loss, pero dito mismong buwis na nga ng kinita nila ang sinisingil pa sa atin,” Colmenares argued.
“This shows that privatization is wrong and the practice of automatic pass-through of forex losses should not be allowed by the government,” he stressed
The progressive solon also hit the practice of Manila Water Co. (MWC)and Maynilad of passing their income taxes, value-added tax, documentation stamps and other taxes to consumers, in effect making the consumers subsidize them.
He described this as an “abhorrent practice” that proves government has no monopoly of corruption, adding that this is “unjust corporate enrichment.”
According to the Water for the People Network, this practice has been going on for seven years and has cost consumers an “unconscionable” P15 billion.
“This is highly questionable and this contract is a sweetheart deal detrimental to the interest of the government and the people and must be voided. This practice must be stopped, especially since both companies are public utilities, whose supposed main principle is public service and not profit. The Metropolitan Waterworks and Sewerage System (MWSS) Regulatory Office should act now to end this practice and have the water concessionaires refund this to consumers,”Colmenares insisted.
“We have filed House Resolution 39 to investigate this practice so that it will be stopped and never happen again. From the investigation, we will craft a law that will prohibit this practice, of only allowing profit-hungry businesses to serve as public utilities,” he added.
Colmenares said that such schemes have allowed MWC to increase water rates by 600 percent since 1997, when the MWSS was privatized.
“In the first place, the MWSS and MWC must first refund billions of pesos it collected from the public for still-unimplemented water projects before it could increase water charges. Among these projects are the P5.4-billion Angat Water Reliability and the P45.3-billion Laiban dam projects. Government has to stop this practice of making the people shoulder all the risks and losses of public utilities and awarding contracts to companies whose main interest is profit, meaning guaranteed profit and protected abuse instead of public service,” Colmenares said.