Up to P16/cubic meter water rate hike seen in SC ruling

Water rates will likely increase by P12 to P16 per cubic meter as a result of a Supreme Court decision last month that will force water companies to finish their sewerage projects within five years instead of until 2037.

Consumer advocacy group CitizenWatch Philippines, in a statement, said the August 2019 decision penalized Manila Water Sewerage System (MWSS) and its two concessionaires, Maynilad and Manila Water, almost P1 billion each for failing to finish their sewerage projects in May 2009, as required by the Clean Water Act, which took effect in 2004.

The SC ruling was announced only in a press briefing but the fines must be paid within 15 days from its release. Daily fines of P322,102 until full compliance had also been imposed, further pressuring the MWSS and its concessionaires to comply and complete their projects by 2022, CitizenWatch said.

CitizenWatch said the new decision is confusing because in 2011, the Supreme Court gave MWSS and its two concessionaires until 2037 to comply since 17 government agencies which were supposed to prepare the way for MWSS and the concessionaires have not fully complied until now.

The group said all local governments in Metro Manila must provide land and right of way for sewerage treatment plants, issue permits, and identify all households and establishments that are not compliant with the law.

Maynilad has a budget of almost P400 billion and Manila Water almost P200 billion to finish sewerage projects until 2037. Compressing the projects in five years would result in higher water rates since sewerage and water rates are bunched together.

Maynilad’s all-in average charge is around P49 per cubic meter now. This includes all charges like environmental fee and value added tax. For Manila Water, it is P39.

“The problem now is how will they comply when the government agencies who must submit and do preparatory work are still remiss. Where is the land? Where is the overall plan from public works to guide them?” CitizenWatch said.

By singling out the concessionaires, the SC is actually penalizing consumers, it said.

“The same Supreme Court already acknowledged this reality before, that is why the deadline was extended to 2037. This deadline gives time to everybody without burdening the public. It is a win-win. In the five-year program, nobody wins, not the government and definitely not us, the public,” the group said./TSB