Water firms going for arbitration

MANILA, Philippines–The two water utility concessionaires in the Greater Manila Area have until Oct. 13 to file for arbitration proceedings.

AFP FILE PHOTO

Following the announcement last Thursday of regulators’ decision to deny their proposed rate hikes for the next five years, both Manila Water Company Inc. and Maynilad Water Service Inc. said they are disputing the decision and are preparing for arbitration.

In a statement published Monday, Maynilad cited Section 7.1 of the concession agreement, where the rate determined by the Metropolitan Waterworks and Sewerage System is submitted to arbitration.

Industry watchers say this would be the third time that the water concessionaires have resorted to such a forum regarding MWSS decisions.

Manila Water spokesperson Jeric Sevilla said the agreement gives the concessionaire 31 days from receipt of a disputed decision to file for arbitration.

Manila Water said in a separate statement that it is going for arbitration to assure its customers a sustainable and secure water supply as well as to address “the need for government to preserve the momentum and gains achieved by the most successful public-private partnership for the last 16 years,” – referring to its concession.

The water utility added that in resorting to arbitration, it is also addressing “the need for the country to protect the sanctity of business covenants” that the government enters into.

The MWSS decision announced last week translates to a rate reduction for Manila Water by P1.48 per cubic meter per year for the next five years. For Maynilad, the effect is a reduction of P0.29 per cubic meter over the same period.

The new rates are supposed to take effect on Oct. 1 but both companies said existing rates will apply during the arbitration process.