MAYNILAD Water Services Inc. (Maynilad) offers the promise of savings to customers in its negotiation for an extension of its concession with the Metropolitan Waterworks and Sewerage System (MWSS).
The concessionaire of the MWSS for the West Zone, Maynilad is seeking a 10-year extension of its concession agreement.
In the rate rebasing concluded last year, Maynilad and the government regulator already assumed the extension of the concession in the determination of the tariff required to recover the private utility firm’s expenditures. This resulted in a lower tariff adjustment of 35.61 percent, computed on a one-time basis, compared to 58.56 percent if the extension was not assumed.
According to the company, this means that its residential customer who uses 30 cubic meters of water per month would save as much as P212 per month from the longer concession since the revised concession agreement (RCA) term extension was already assumed in the recent rate rebasing.
Maynilad said through a statement issued on December 4 that extending the agreement “strengthens the company’s operational and financial capabilities, and enables it to provide consumers with affordable water service without undue uncertainty or delay.”
“With it, Maynilad will have a longer cost recovery period, resulting in lower tariff increases,” according to the company. The reduction in the tariff increase translates to real savings for consumers, making water services more affordable and manageable for households and businesses alike, it added.
“The extension represents a mutually beneficial arrangement for Maynilad and our valued customers. Beyond our commitment to ensuring a sustainable water future, it underscores our dedication to making our services more affordable to our consumers. By reducing the necessary tariff increase, we’re making water services more affordable, making life better for the communities we serve,” Maynilad President Ramoncito S. Fernandez was quoted in the statement as saying.
Currently, Maynilad operates under the RCA with MWSS, an agreement that is set to conclude on May 6, 2037. Under Republic Act 11600, struck on December 10, 2021, Maynilad’s franchise is slated to span a quarter-century, extending through to 2047.
“Aligning the RCA with our legislative franchise is a strategic and crucial step towards a sustainable water future. This foresight allows us to engage in long-term planning and substantial investment in our water infrastructure. With a clear vision towards 2047, we are in a stronger position to allocate our resources efficiently, particularly for significant projects and necessary improvements,” Fernandez added.
Promise to invest
ACCORDING to Maynilad, it has set aside P85 billion if its concession is extended for 10 years. The company said this plan is hinged on “elevating the quality of service to existing customers while broadening operational scope.”
The firm said it envisions a “significant expansion” of its water services to an additional 200,000 individuals. The expansion will expand its market base from 11.6 million in 2037 to 11.8 million by 2047 within the designated concession area.
The company’s strategic vision also encompasses growth in both domestic and non-domestic customer bases, with ambitious plans to facilitate 40,383 new water service connections, according to Maynilad.
Recognizing the importance of infrastructure development, a substantial portion of the capital investment will be dedicated to replacing 250 kilometers of aging pipelines, the company said. Maynilad said this initiative is pivotal in the control of non-revenue water, with a target of water loss to 20 percent by 2030 and sustaining that level until 2047.