DOF verifies Maynilad’s P3.44B claim
MANILA, Philippines – The Department of Finance (DOF) is verifying the compensation claim of the Maynilad Water Services Incorporated for supposed losses incurred due to the postponed implementation of the basic water charge hike.
The Metropolitan Waterworks and Sewerage System (MWSS) made the announcement on Friday, March 13.
The Metro Manila west zone concessionaire is seeking P3.44 billion ($77.67 million) compensation from the governmnt for revenue losses it claims to have incurred from January 1, 2013, to February 28, 2015.
The MWSS postponed the awarded base water rate hike, which was proposed to be staggered over a 3-year period, until the arbitration process for both metro water concessionaires (including Ayala-led Manila Water Company Incorporated) are completed.
“I’m very happy that (Finance) Assistant Secretary (Ma Teresa) Habitan disclosed that they are making computations. They are now examining the claim of Maynilad, if the numbers are indeed correct,” MWSS chief Regulator Joel Yu said.
The move of the DOF to step in is to prevent “inconsistencies” in the implementation of the concession agreement, particularly the recovery of corporate income tax.
MWSS maintained that Maynilad would not be incurring losses because it is allowed to recover its investments for the remainder of the concession agreement, through succeeding rate rebasing in 2017, 2022, 2027, and 2032.
“From our view, there is no ground for that guarantee. It cannot be substantiated,” Yu said.
Yu also stressed that Maynilad needs to establish grounds for the claim, like if the government is interfering in the rate setting as provided for in the concession agreement.
The postponement to implement Maynilad’s proposed rate hike is not because the MWSS intends so, but in consideration of the rate rebasing exercise and the arbitration proceedings.
“There is nothing like that and so there is no ground. We honored their right to dispute, we would have implemented the negative (adjustment),” Yu stressed.
But Maynilad previously said that the postponement of the implementation of the rate hike threatens its operations.
The amount of the claims will continue to rise as long as the MWSS declines to implement the rate hike, Maynilad said in a statement March 10.
Maynilad is co-owned by Pangilinan-led Metro Pacific Investments Corporation (MPIC) and Consunji-controlled DMCI-Holdings Incorporated.
Maynilad services the west zone of Metro Manila covering Manila (all but portions of San Andres and Sta. Ana); Quezon City (west of San Juan River, West Ave.) EDSA, Congressional, Mindanao Ave, northern part from the districts of the Holy Spirit and Batasan Hills; Makati (west of South Super Highway); Caloocan; Pasay; Parañaque; Las Piñas; Muntinlupa; Valenzuela; Navotas; and Malabon, cities of Cavite like Bacoor and Imus and towns of Kawit, Noveleta, and Rosario. – Rappler.com
US$1 = P44.2
Water meter image via Shutterstock