MWSS charged water firms extra P800 million, says COA
INQUIRER FILE PHOTO
MANILA, Philippines — Collections by the Metropolitan Waterworks and Sewerage System (MWSS) from water concessionaires worth more than P800 million were excessive and will result in additional tariffs for consumers, according to the Commission on Audit (COA).
In its annual report on the MWSS, state auditors explained that these collections made from fiscal years 2019 to 2022 were provided for under the agency’s agreements with concessionaires Maynilad Water Services Inc. and Manila Water Co. Inc.
Based on the COA’s examinations of the receipts from Maynilad and Manila Water, the MWSS billed and collected the actual share of the two water companies for the costs and expenses, which involved the implementation of the New Centennial Water Source-Kaliwa Dam Project.
Some of the collections were also made to pay for the salaries of personnel of the Bantay Gubat initiative and expenses for the Ipo Watershed Development Program.
The audit team provided an itemized list of the excess collections, the largest of which were standby costs for civil works of Kaliwa Dam.
Article continues after this advertisementThe MWSS had collected P155.3 million each from Maynilad and Manila Water in 2022, with a total of P310.7 million billed from both concessionaires.
Article continues after this advertisementIn 2021, the MWSS had collected P16.4 million from Maynilad for the preconstruction activities of Kaliwa Dam, and P35.4 million from Manila Water. For the salaries and wages of the Bantay Gubat project, Maynilad was billed with P3.2 million in 2022, P11.5 million for 2021, P8.3 million in 2020 and P9.5 million in 2019. As for Manila Water, it paid P3.6 million in 2022, P11.3 million in 2021, P7.9 million in 2020 and P9.4 million in 2019.
Higher fees
For the collections covering the Kaliwa Dam and the Bantay Gubat Fund, the fees received from the concessionaires were “excess of the limitations set under the concession agreement,” according to state auditors.
The excess collections may result in higher fees for water consumers, as the concessionaires will have to recover these through higher tariffs.
“MWSS should be prudent at all times in its determination of billings to the concessionaires for its actual share of costs and expenses,” the COA stressed. “All the fees and charges received from the concessionaires will be recovered… through collection of tariffs from the consumers.”
‘Unauthorized’
Upon the audit team’s clarification with the Department of Finance (DOF) this year, they were told that the MWSS was allowed to collect concession fees under the agreements.
However, the lack of approval of the DOF for the billing of additional local counterpart funds from the concessionaires made the collections “unauthorized.”
The COA said this would result in irregular expenditures of the concession “which will be recovered from the consuming public through tariffs.”
The MWSS, for its part, insisted that the costs and expenses that they billed Maynilad and Manila Water were all covered by the concession agreements.
The audit agency recommended that the MWSS “immediately suspend” the billings and collections of additional costs from the concessionaires unless there is an “expressed approval” from the DOF.
