Maynilad submits staggered fee hike schedule

MANILA, Philippines - Metro Manila West Zone water concessionaire Maynilad Water Services has submitted to the Metropolitan Waterworks and Sewerage System (MWSS) its proposal for a staggered implementation of the increase in it basic charge as awarded post-arbitration.

Maynilad chief financial officer (CFO) Randolph T. Estrellado yesterday said the proposal for a three-year staggered implementation of increase in the base water rate has been submitted both to the corporate and regulatory offices of the MWSS on Jan. 8.

“The MWSS said they will be reviewing our proposal. We will just follow up after a reasonable amount of time. The MWSS board meets twice a month so they can take it up as soon as they’re ready,” he said in a text message.

The MWSS board had a meeting last Jan. 9, he said, but was not yet able to take up the company’s proposal.

The International Chamber of Commerce (ICC), which facilitated the arbitration proceedings between MWSS and Maynilad, ruled in favor of an increase in the water firm’s base water rate.

In a decision dated Dec. 29, 2014, the ICC appeals panel upheld its alternative rate rebasing adjustment which would result to a 9.8-percent increase in the 2013 average basic water charge of P31.28 per cubic meter inclusive of the P1 Currency Exchange Rate Adjustment that the MWSS incorporated into the basic charge. This translates to an average increase of P3.06 per cubic meter in its basic charge.

In coming up with an alternative business proposal during the arbitration process, Maynilad opted not to pursue several water sourcing projects, but would continue to fulfill its obligations within its concession area.

Maynilad aims to implement the rate hike in three equal tranches beginning this year so as to minimize the impact of the increase on consumers.

In 2013, the MWSS rejected the applications of Maynilad and Manila Water Co. Inc. for increased base charges.

Instead of increasing water rates, the MWSS approved reductions in base water rates, which were supposed to be implemented in tranches in the next five years beginning 2014.

MWSS acting chief regulator Emmanuel Caparas earlier said the board had approved the downward adjustment in water rates as the two firms were unable to justify the need for higher rates based on their business and investment plans for the next five years.

As provided for in their concession agreements with the MWSS, the water concessionaires have filed dispute notices before Paris-based ICC.