MWSS to hire external auditors to determine Maynilad’s loss claims

The Metropolitan Waterworks and Sewerage System (MWSS) is set to hire external auditors to check on the claims of Maynilad Water Services Inc. that it is no longer viable for the firm to provide water service to the western half of Metro Manila.

This was among the initial steps agreed upon by the nine-member MWSS board, which temporarily took over Maynilad’s concession after it was returned to the MWSS last Monday.

MWSS officials have said that Maynilad could be paid from P5 billion to P17 billion for giving up the concession, though it still owes the MWSS P4 billion in unpaid franchise fees.

"The auditors will help us find out what really happened," a source said.

The MWSS board also created a five-member panel to prepare its defense before the arbitration committee earlier set up by the government to determine if Maynilad has grounds to abandon its contract

The defense team will be headed by Government Corporate Counsel Manuel Teehankee with four other MWSS board members, who were not identified by The STAR’s source.

The MWSS board is composed of Teehankee, Public Works and Highways Secretary Simeon Datumanong, DPWH administrator Orlando Hondrade, Joji Cruz of the Department of Finance, Datumanong’s chief of staff Lorenzo Sulaik, and Alfred Reyes, Jay de Castro, Anthony Dumlao, and Amouri Gutierrez from the private sector.

The MWSS is expected to make its response to Maynilad’s claims on Jan. 8.

Meanwhile, as far as Malacañang is concerned, the government prefers that the Lopez-owned Maynilad would continue with its concession providing water to half of Metro Manila.

Datumanong, who is also chairman of the MWSS board of trustees, told Palace reporters that solutions are being worked out between Maynilad and MWSS, the industry regulator.

He declined, though, to go into details, saying that at this point they have only agreed to prepare the case for MWSS and endeavor to have a dialogue with Maynilad.

Datyumanon said that there might be a chance for some solution other than the termination of the concession considering the fact that privatization is a concern of the government.

"We have agreed on some common grounds. Probably, we can study what will be good for the relationship between MWSS and Maynilad," he said.

Asked if this solution involves the grant of a new round of rate increase to Maynilad, Datumanong retorted: "Not necessarily. That is why I said what is good on a common ground."

In his press briefing at Malacañang yesterday, Presidential Spokesman Rigoberto Tiglao said President Arroyo has left to the DPWH secretary how to handle the Maynilad problem.

"We prefer these talks to remain at that level unless a decision by the President is required," Tiglao said.

Protests

Militant groups Kilusang Mayo Uno (KMU) and the Freedom from Debt Coalition (FDC) slammed Maynilad’s decision to abandon its 25-year franchise to supply water to the west zone.

The FDC said that by putting the blame on government, Maynilad hopes to recover around P13 to P21 billion it had invested. However, if the arbitration panel finds out that Maynilad itself was to blame for its failure to efficiently run the west zone, it will recover only around P4 billion.

"But if you consider the P4 billion in concession fees that Maynilad owes the government, they will receive nothing," FDC national president Ana Maria Nemenzo said.

Contrary to Maynilad’s claim, she said, the government has been very generous with Maynilad even at the expense of consumers’ interest.

"Last year, government allowed Maynilad to implement a substantial rate increase by allowing accelerated recovery of its foreign exchange losses even though the concession agreement does not allow it. In fact, the government had to amend its contract to accommodate Maynilad’s demands," she added.

Nemenzo laments, though, that government’s giving in to Maynilad’s every demand did not make the company viable because of inefficiencies in its operations and mismanagement.

Maynilad may also soon face a string of legal suits as the KMU called on all Maynilad consumers yesterday to file civil suits against the company for abandoning its concession.

"It is very obvious that Maynilad has no intention to provide genuine service to consumers," KMU spokesman Sammy Malunes said.

According to Malunes, the move taken by the Lopez Group of Companies is an absolute economic swindle that merits legal suit and widespread condemnation from the consumers.

"There’s a clear deception because now they are returning the water concession because they were not able to achieve their desired profit margins," he said.

Members of the KMU will lead a protest action today in front of the Benpres Holdings Office in Ortigas to express their strong objection against its anti-people policies.– With reports from Mayen Jaymalin, Leo Solinap