PRIVATE concessionaire Manila Water, under fire for allegedly onerous provisions in its 1997 contract with the government, said on Wednesday it was prompted to seek international arbitration after the government ignored pleas for a rate hike to help it recoup billions of investments to vastly improve water and wastewater services.
Manila Water said it has “diligently discharged its obligations as concessionaire of MWSS [Metropolitan Waterworks and Sewerage Systerm], spending over P166 billion” to improve its services.
“Manila Water would like to state certain facts in the interest of public discussion on the award recently issued by an arbitral tribunal in favor of Manila Water as administered by the Permanent Court of Arbitration. We wish to clarify that the PCA is an internationally recognized intergovernmental organization,” the Ayala-led concessionaire said in a statement.
It recalled how, in 1997, it had heeded the call of the Ramos administration for concession agreements with MWSS to address the water crisis in Metro Manila—something that in turn was traced to the “incapability of the MWSS to maintain viable operations due to technical inefficiencies and enormous financial debts.”
The government then “unilaterally determined the terms of the agreements, which were bidden out on a take it or leave it basis,” Manila Water recalled.
Manila Water said it offered the lowest fee to serve as concessionaire of MWSS, which decided to pay the fee with the water tariff to be collected by the concessionaire. Manila Water was subsequently awarded the Concession Agreement for the East Zone.
With its P166-billion investment, Manila Water said it installed over 5,500 kilometers of pipes and built two new filter plants, 32 new reservoirs, 113 pumping and booster stations, 40 additional wastewater treatment facilities and five times more sewer network capacity to improve the MWSS facilities in the East Zone.
This, it added, “resulted in the expansion of water service coverage in the East Zone from 67-percent coverage serving around 3 million people to 93-percent coverage serving over 7 million people. This includes an additional 2 million customers from the poor and marginalized sector, who used to buy vended water in buckets or pails delivered by vendors in pushcarts. Manila Water services allowed them to save about 90 percent of what they used to pay for water.
We also reduced water losses from 63 percent to less than 12 percent, saving 700 million liters per day of water.”
The company explained that the Concession Agreement—which the DOH has deemed disadvantageous to government—ended up containing a procedure for the adjustment of water rates in accordance with the MWSS Charter because “MWSS decided to pay our services and reimburse our costs with the water tariff that we collect.”
“The Republic of the Philippines undertook to respect the procedure, which is under the full control of MWSS from beginning to end,” said Manila Water.
“The arbitral award issued in our favor is for acts in breach of the procedure committed by officials of the previous administration, not the Duterte administration,” clarified the company.
“We wish to reiterate that Manila Water is more than willing and has started to work with the incumbent administration to come up with a workable solution to the arbitration decision,” it concluded.