COA flags MWSS for overbilling Maynilad, Manila Water  

MANILA, Philippines — The Commission on Audit (COA) has flagged the Metropolitan Waterworks and Sewerage System (MWSS) for overbilling concessionaires Manila Water Co. Inc. and Maynilad Water Services Inc. in the last four years, amounting to P845.71 million, for the Kaliwa Dam project.

In its 2022 annual audit report, the COA said the state-run regulator made Manila Water and Maynilad shoulder additional local counterpart funds for the actual implementation of the New Centennial Water Source-Kaliwa Dam Project (NCWS-KDP) from 2019 to 2022.

State auditors said this was on top of concession fees that the two firms had been paying MWSS pursuant to the 1997 Concession Agreement and 2021 Revised Concession Agreement.

The excess collections from Manila Water and Maynilad may be passed on by the two concessionaires to consumers, state auditors warned.

“MWSS should be prudent at all times in its determination of billings to the concessionaires for its actual share of costs and expenses. All the fees and charges received from the concessionaires will be recovered by the concessionaires through collection of tariffs from the consumers,” the COA said.

Under former president Rodrigo Duterte in 2018, the government secured a $211.21-million (P12.2-billion) loan from the Chinese government through the Export-Import Bank of China under the Official Development Assistance program.

The loan shall finance 64 percent of the P18.7-billion total cost of the Kaliwa Dam project in Infanta, Quezon, which is expected to stabilize Metro Manila and nearby provinces’ water supply.

The MWSS management argued that based on the tripartite Memorandum of Agreement it entered with Manila Water and Maynilad on Oct. 4, 2018, the two concessionaires are “obligated to pay all the necessary local counterpart funds in the execution of the (Kaliwa Dam) project.”

The COA maintained that amounts collected by the MWSS from Manila Water and Maynilad already exceeded the limitations set.

Aside from Kaliwa Dam project costs and expenses, the two concessionaires were also billed for the salaries and wages of Bantay Gubat forest rangers and expenses related to the Ipo Watershed Development Program.

In 2019, Manila Water and Maynilad were made to pay P25 million each for the “acquisition of lots affected in the construction” of the Kaliwa Dam and P9.5 million each for the salaries of Bantay Gubat.

In 2020, they paid P3.1 million each for “pre-construction activity” for the Kaliwa Dam project, P10 million each for “free prior and informed consent” process and P8 million each for the salaries and wages of Bantay Gubat.

In 2021, Manila Water and Maynilad paid P35.42 million and P16.41 million, respectively, for “pre-construction activities” for the Kaliwa Dam project and P11.3 million and P11.5 million, respectively, for the salaries and wages of Bantay Gubat.

Maynilad also solely paid P25.09 million for “lot acquisition of outlet portal” for the Kaliwa Dam project.

In 2022, they paid P155.37 million each for “standby cost/civil works” for Kaliwa Dam, P80 million each for “One-time Disturbance Compensation” for indigenous peoples and P3.6 million and P3.4 million, respectively, for the salaries and wages of Bantay Gubat.

Manila Water also solely paid P155.3 million for “development fee, annual fee and bond for the Special Use Agreement in Protected Areas.”

“We recommended that MWSS… immediately suspend the billings and collections of additional costs and expenses from the concessionaires in excess of the limitations of the Concession Agreements, unless there is an expressed approval of the Department of Finance for MWSS to collect additional concession fees,” the COA said.