MANILA, Philippines—A party-list lawmaker is seeking to nullify the water concession contracts of Manila Water Co. and Maynilad Water Services Inc. if they refuse to remove onerous provisions that allowed them to pass on their income taxes to consumers.
Bayan Muna Rep. Neri Colmenares said officials of the Metropolitan Waterworks and Sewerage System (MWSS) should also be penalized for agreeing to a “sweetheart deal” with Manila Water of Ayala Corp. and Maynilad of Metro Pacific Investments and DMCI Holdings, and failing in its mandate to protect the public interest.
“The concessionaires should publicly declare the total amount collected and the amount paid, and refund (it). If not, the contract must be nullified on the ground that it is grossly disadvantageous to the government and is against public policy… (and the water companies) should be ordered by the court to refund the amount,” said Colmenares in a phone interview.
Colmenares said he was disappointed with the “defeatist” attitude of MWSS acting chief regulator Emmanuel Caparas who admitted that while the move of Manila Water and Maynilad to pass on their income taxes to consumers was “grossly unjust,” the two concessionaires might not be liable for any refund because this was allowed under their respective agreements.
The Water for People Network (WPN) estimated that passed income tax payments which were inserted in their list of operating expenses from 2008 to 2012 could amount to P3.1 billion a year, or a total of P15.3 billion.
Colmenares said Caparas and the rest of the MWSS officials “betrayed their bias” for Manila Water and Maynilad, despite the supposed transition to the “daang matuwid” (the straight path of the Aquino administration).
“We will not tolerate an onerous deal and it should be nullified if not revised immediately. The water concessionaires may say that this is a violation of the contract but what they are doing is detrimental to consumers and (they) should indeed stop this practice. The MWSS must be sanctioned for sleeping on the job and not defending consumers’ rights,” said Colmenares.
Colmenares and Sen. Ralph Recto have announced separate plans to file a resolution in their respective chambers to investigate Manila Water and Maynilad’s billing practices.
Aside from a congressional probe, Bagong Henerasyon party-list Rep. Bernadette Herrera-Dy said the Ombudsman should also conduct an investigation into overcharging by Manila Water and Maynilad.
“There are certain indications that government men have dipped their dirty fingers into these scams. The fact that nobody among the MWSS men had questioned the scam for over four years already shows collusion,” said Dy in a statement.
What happened to dams?
Dy said that aside from passing on their income taxes to consumers, the two concessionaires should be made to account for the P6 billion they collected for water and sewerage system improvement projects that never materialized.
She claimed that these collections were supposed to have been used to fund the redevelopment of the Laiban and Angat dams that have been abandoned.
“Manila Water and Maynilad have yet to submit to the public a direct and clear explanation about these issues which we first brought up at the start of the 15th Congress in 2010,” said Dy.
Both Colmenares and Dy also cited the decision of MWSS to give the two concessionaires a 15-year extension of their contracts without any bidding (their 25-year agreements will end in 2022) as proof of an “unholy alliance” between the watchdog and its subjects.
The MWSS is also currently under fire from the Commission on Audit for continuing to approve huge bonuses and allowances for its officers and staff.
In its 2011 report, the COA questioned the P142.3 million in allowances, bonuses and benefits given to MWSS officers and employees in 2011 on top of the P65.98 million in regular salaries that year.
Colmenares and Dy said this showed that despite the change in its management, the MWSS has carried over its policy of excessive perks from the Arroyo administration to the current one—even though President Aquino himself slammed this practice in his State of the Nation Address in 2010.