Stop rate rebasing until onerous fees resolved – WPN

Advocacy group Water for the People Network (WPN) is appealing to the Metropolitan Waterworks and Sewerage System – Regulatory Office (MWSS-RO) to halt the ongoing rate rebasing process that is expected to raise water rates in Metro Manila and its environs, saying the basis for determining future water rates remains unresolved.

Concessionaires Maynilad and Manila Water continue to contest the MWSS-RO’s 2013 decision to prohibit water companies from passing on their corporate income tax and other questionable expenses to consumers. Both companies took to international arbitration to protest government’s denial of their petitioned rate hikes, with Maynilad demanding government to pay Php72 billion in lost revenues and Manila Water demanding Php10 billion. Both cases are still pending in the courts.

WPN said that pending resolution of both controversies, any rate rebasing scheme would be conjectural and would burden the public with unjust and unnecessary increases in the midst of soaring prices.

“With continued lack of transparency in the rate rebasing process and petitions, water companies could make another attempt to pass on questionable charges to consumers through their water bills,” said former party list representative Teddy Casiño, a convenor of the WPN.

For the 2018-2022 rate rebasing period, Maynilad is seeking an estimated Php12 per cubic meter increase, while Manila Water is seeking and Php8 per cubic meter increase. Rate rebasing pertains to the periodic computation of water rates based on government’s review of the concessionaires’ petitioned new tariffs. The latter supposedly covers the companies’ past and projected expenses and a guaranteed rate of return.

However, due to water consumers and advocates’ clamor during the rate rebasing process in 2013, previous water regulators disallowed corporate income tax and other expenses unrelated to the delivery of water from being computed into the water bill.

Casiño said that since 1997 when water utilities were privatized, basic or average water tariffs have soared by as much as 596% under Maynilad and 970% under Manila Water, contrary to the promise of affordability. Studies also showed urban poor families end up shelling out thousands of pesos beyond their means for either fetched water from the community pump or submeter water access in the absence of direct water connections.

“WPN hopes that the government will look upon the rate rebasing petitions with public interest foremost in mind,” Casiño said. He added that the network will guard against the inclusion in the bill of the Php82-billion uncollected funds which both private companies have pleaded international arbitration courts to demand from the government.

According to Casiño, government’s accession to the companies’ demands would certainly entail higher user fees. “This will double the burden on poor Filipinos who are already struggling with price hikes due to the new taxes,” he said. Casiño challenged the government to not allow companies to impose onerous fees for profit. ###




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