Like fees out of water

The crucial point in the hot issue over the water concessions in Metro Manila is actually the contract between the two water companies and government outfit MWSS.

The two companies, Manila Water (Ayala group) and Maynilad (MVP group), are in hot water supposedly for passing on certain operating costs and income tax payments to the consumers—i.e. bloated water fees.

But the business sector, as indicated in statements issued by influential business organizations, argued those pass-on items were actually specified in the concession agreement. These statements were apparently in reaction to reports that were inspired by a leftist group of consumers called WARM, insinuating that those add-ons were illegal.

No wonder, members of both the Senate and the House of Representatives called for separate investigations of the concessions, although stalwarts in the legislature, such as Sen. Juan Ponce Enrile and Rep. Neptali Gonzales Jr., warned against the futility of the congressional inquiries.

This early we can expect the word war over the water issue to be brutal.

Still, the group called WARM already brought the issue to the Supreme Court, questioning the provisions in the agreement between the two companies and the MWSS. If the ultimate arbiter in disputes over contracts, the Supreme Court itself is already on top of the issue, why do our beloved legislators still want to conduct hearings in Congress?

Sen. Antonio Trillanes last week said on the Senate floor: “Nobody knows in this chamber right now, verbatim, the contents of the concession agreement which now necessitates an inquiry.” And this country needed a time-consuming congressional investigation for that?

Everybody thought that, for our lawmakers to study the concession agreement, they could simply ask for copies of the contract from the parties themselves, particularly the MWSS.

At the end of it, after the congressional investigations, Congress could still not do anything about the contract. This, according to legal luminaries like Enrile and Gonzales, would be against the law, because the Constitution holds contracts as sacred.

For his part, Trillanes pointed out that the Supreme Court already ruled that another utility firm, electricity distributor Meralco, could not pass on its corporate income tax payments to consumers.

But the 89-year old JPE agreed that Meralco did not have the authority to pass on its income tax payments to its customers, because its franchise did not spell out such an authority.

The difference is that the water companies were mere concessionaires, while the MWSS held the utility franchise, and so rate computation was based on the “contract” between the MWSS and the water companies.

To top it all, the Senate had nothing to do with the issuance of the water franchise, because all utility franchises should come from the House. Enrile insisted that the Senate was like fish out of water, because only the House could touch any franchise.

Here is the thing with those so-called add-on charges: Their removal from the computation of the water rates would not affect the rates at all, according to former Economic Planning Secretary Felipe Medalla.

He noted that the agreement between the water companies and the MWSS clearly stated a “guaranteed” ROR (rate of return), which was specified as “net of taxes,” meaning, the ROR should be computed after taxes.

It follows that if you remove the tax payments and other add-ons from the computation of the water rates, you still have the same ROR to contend with, which in the end would still result in the same water rates.

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In investigating malfeasance in the government, the Office of the Ombudsman seems to be highly selective.

Ombudsman Conchita Morales persisted in filing graft charges against former DBP officials. From what I gathered, it was on her instance that the Sandiganbayan in fact issued arrests warrants against the 13 respondents in the DBP case.

Morales wasted no time in filing charges against former Cebu Governor Gwen Garcia. She was instrumental in the impeachment of former Chief Justice Renato Corona. She pursued cases involving former President Gloria Macapagal-Arroyo (aka Gloriaetta) and others in the cute administration.

Yet the Ombudsman seems to take its sweet time in the investigation of charges against known friends of our dear leader, Benigno Simeon (aka BS). Pending in the Ombudsman for the past two years, for instance, was a graft case against DBP chair Jose Nuñez.

There were also complaints against LTO chief Virginia Torres. More than two years ago, Justice Secretary Leila de Lima recommended that Torres be suspended from office, because Torres obviously took sides in the intra-corporate squabble in the company that happened to be the IT provider of the LTO.

Former DOTC head Jose de Jesus was vocal about the removal of Torres from the LTO, although it was said that our dear leader, BS, prevailed over De Jesus, which was one of the reasons why De Jesus resigned from the Cabinet.

Now, Torres was always known to be a member of an influential religious group that wielded political clout. As calls for her resignation mounted at that time, Torres even openly flaunted her “closeness” to our dear leader, BS.

Under Torres, the LTO seems to be helpless in solving the high incidence of carnapping. To think, the LTO already computerized vehicle registration, which supposedly should make the registration of stolen vehicles rather impossible. Word goes around that the syndicates have penetrated the LTO.

Torres cannot seem to solve the problem, while the Ombudsman continues to sit on the complaints against her. To this day the LTO chief remains impervious to any investigation by the rather selective Ombudsman.

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A controversy of sorts seems to be brewing among members of the Wack-Wack Golf & Country Club over the proposed amendments to the club’s constitution and by-laws.

According to the present board, there is no plan for long-term lease on the real estate properties of the golf club, because the proposed amendments only cover short-term leases like those for a barbershop, canteen and bakeshop.

Still, one proposal is to limit the term of a board member to at most two terms, thus giving the chance to other members to become directors, in a way ending the era of virtually perpetual directors.