[Press Release] FDC and PATTAK slam ruling granting Maynilad water rate hike

Groups slam ruling granting Maynilad water rate hike

The Freedom from Debt Coalition and the water consumers group Pagkakaisa ng mga Tagapagtangkilik ng Tubig sa Kamaynilaan (PATTAK), today slammed the recently announced ruling of an arbitration panel which grants Maynilad the right to hike its water rates for Metro Manila’s West Zone saying it sends the message that corporations can do whatever they please in the country.


When Metro Manila’s water services were privatized in 1997, the service area was divided into two geographically separate zones–the West zone which includes old Manila and the province of Cavite which was awarded to Maynilad and the East zone which includes much of the Makati business district and expanding suburbs, which was awarded to Manila Water.

“The decision legitimizes abuses committed by the water companies, such as passing on their corporate income taxes to consumers, which were a major basis for the MWSS’ decision last year to order water rate cuts and which are currently the subject of a legislative investigation. It tells other would-be investors that in the Philippines, you can rob the people blind and get rewarded for it!” Samuel Gamboa, FDC Secretary-General said.

Maynilad and East Zone concessionaire Manila Water had sought arbitration through the Paris-based International Chamber of Commerce (ICC) following a Metropolitan Waterworks and Sewerage System (MWSS) decision to reject their petitions for water tariff increases and to order them to instead slash rates. Section 12.1 of the Concession Agreements signed by the government and the two water concessionaires provides for arbitration to resolve disagreements that cannot be resolved through consultation or negotiation.

“This announcement is confirmation of what water consumers have been dreading all along. After being deprived of lower water rates based MWSS’ decision in 2013, they are now struck with a double whammy. The water rate hike which will be retroactive to 2013, and the cost of the whole arbitration process including fees for not just the government’s representative but also the representative of the ICC and the water companies representative,” Gamboa noted.

FDC and PATTAK blamed the lop-sided Concession Agreements saying the mechanism for dispute settlement virtually guarantees that the ruling will always favor the corporations.“The arbitration system chaired by a representative of the ICC, an international organization created ‘to make it easier for businesses to operate internationally’. It is held behind closed doors, with no representation from water consumers and under constant pressure from investor groups both local and foreign. Clearly, it is heavily skewed in favor of the concessionaires,” Gamboa noted.
The Metro Pacific Investors Group, a majority stakeholder in Maynilad, had declared that the company stood to lose as much as P1.9 billion should the arbitration panel rule against it. Manila Water was expected to lose P1.07 billion.

Ang desisyon na ito ay maliwanag na kontra-mamamayan. Inilantad nito na moro-moro lamang ang naganap na proseso ng arbitration at ipinakitang ang Concession Agreement ay kontrata lamang na humahadlang sa pamahalaan na gamitin ang kanyang kapangyarihang rendahan ang mga pribadong korporasyon. (This ruling is patently anti-people. It exposes the arbitration process as a sham and the Concession Agreements between the government and the two water companies as little more than a contract to prevent government from exercising its power to regulate private corporations),” Flora Santos, PATTAK Sec-Gen. said.

FDC and PATTAK called on the national leadership to act swiftly and uphold the interest of the public.

“The MWSS Regulatory Office has proven to be a paper tiger under the current set-up. It clearly cannot uphold public interest under the Concession Agreements. It cannot even enforce its decisions especially when those decisions run contrary to large corporate interests like Maynilad and Manila Water. The Aquino administration step in and decide whether to protect the people’s interests or business interests,” Gamboa said.

FDC and PATTAK vowed to lead protests and other actions to block the implementation of the rate hikes.

January 7, 2015

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