Using bluff, bluster, expletives, and the whole might of the presidency, Rodrigo Roa Duterte has bludgeoned to submission the two concessionaires of Metro Manila and nearby provinces, Manila Water Co. of the Ayala Group for the East Zone, and Maynilad Water of the Hong Kong-based First Pacific group of Manuel V. Pangilinan and Marubeni of Japan for the West Zone.
Manila and Maynilad will no longer pursue collection of the P7.39 billion and P3.4. billion, respectively, in unpaid rate increases from the years 2014 to 2018. The amounts were awarded them by the Singapore-based Permanent Court of Arbitration. The state-owned MWSS had previously disapproved the rate increases. Without the rate hikes, Manila and Maynilad naturally claimed “losses”—totalling P10.8 billion. After the Singapore award, Manila and Maynilad sent the bill to the Philippine government. Duterte learned about it and blew his top. He went into paroxysm of anger and fury.
Duterte threatened the owners of Manila and Maynilad Water with jail time (he said he would suspend the writ of habeas corpus, which means to me, indefinite detention without the state being made to produce the bodies), a charge of economic sabotage (a non-bailable offense), and rescission of their water concession contracts. Duterte also vowed that if he sees the owners, he would slap them in public.
The President asked Justice Secretary Menardo Guevarra and Solicitor General Jose Calida to cure defects in Manila and Maynilad Water’s water concession contracts. These defects include the state’s powerlessness to intervene and to stop hefty rate increases and to stop the water companies from being allowed to pass on every conceivable cost, including income tax, to their consumers.
On Tuesday, Dec. 10, 2019, MWSS announced the revocation of the extension by 15 years of the two companies’ water concession contracts, from 2022 to 2037. The extension was granted in 2008 by President Arroyo. The original water contracts were awarded in 1977 by President Ramos in an open, transparent public bidding.
Geny Lopez of Benpres and ABS-CBN won both contracts in 1997 but was told to give up one. He chose the West Zone, which had more people, more houses. It was a mistake.
Stretching from Caloocan to Cavite, the West Zone indeed had more people – more people who could not afford the water and so just stole it. It also had more old pipes—which needed immediate replacement. It had more debts, which needed immediate payment. The West Zone has 9,700 kms of pipes – which if put end to end would reach Qatar –a flying distance by jet of nine hours.
The West Zone bankrupted Geny who piled up $240 million in debts. In 2007, Metro Pacific of Manuel V. Pangilinan and DMCI of Sid Consunji took over. They made the West Zone handsomely profitable.
In 1977, when MWSS was in charge of Asia’s oldest water and sewerage system, I had no Nawasa water in my BF Homes Parañaque house in Las Piñas, today a Maynilad Water territory.
So I installed two water pumps, each of which was seven pipes deep. If one pipe was 10 feet, then seven pipes were 70 feet. The water was free but I had to pay Meralco for running the pumps 12 hours a day, and the deep well contractor to clean the pumps and the pipes every three to six months, about P2,000 per work. In effect, my water was expensive, very expensive.
But having no water is more expensive than expensive water. At that time, Nawasa water was only P30 a month—if you could have it. Two years ago, I asked Maynilad to install three water meters in two BF Homes houses. Installation fee was P40,000. Today, the water charge is about P1,800 a month for the three meters, in two houses where the main occupants are three dogs and a stray cat. This makes Maynilad Water far more expensive than deep well water. You see, water is the new gold.
In 1989, I bought a small townhouse in Pasadena, San Juan. It had Nawasa water, 24/7. Pressure was good because San Juan is very close to the La Mesa water reservoir. The water cost me only P30 a month—until 1997.
Today, that P30 is more than P660 a month—22x more or a 2,100% increase in less than 10 years. It’s like a 210% rate increase per year, without a significant improvement in service, except that Manila Water changed the water meter from solid brass to plastic blue. The needle of the new meter also moves faster, which implies higher water consumption in a house where there is not a single occupant. My turntable needle moves far, far more slowly and it produces beautiful music.
My November bill is P660.08 for 29 cubic meters of water for my Pasadena St., San Juan townhouse where NOBODY stays. Aside from the basic charge of P478.26, there are other “strange” charges –P11.62 “FCDA” or the peso-dollar rate differential, P97.98 “environmental” charge (I guess not staying in my unit harms the environment), a P1.50 maintenance service charge (I don’t see any water technician visiting the unit), and a P70.72 VAT (the government share). In the 30 years I owned the unit, I never saw any government man visit me, except for a not-so friendly BIR personnel who routinely sends me an “explain this” letter every year. So I get “taxed” for government trying to collect more taxes.
By the way, both Manila and Maynilad Water have not paid a single centavo of corporate income tax to the government. That tax is paid by us, water users.
Importance of water
Water is not just for drinking, bathing, cooking, and sanitation. According to statistics, 60% of diseases of Filipinos have to do with water – dirty water or lack of water. Think of cholera, diarrhea, dysentery, hepatitis A, typhoid, polio and stunted growth. These are debilitating or deadly diseases.
I am sure water consumers are clapping loudly or silently in their hearts for what Duterte has done to the two water concessionaires.
Problem is this: What happens if there is a water crisis and the private water concessionaires are gone and nobody is there to pipe in the water? It is a possibility nobody wants to drink to. — Tony Lopez