MWSS asked to comply with arbitration court rule

MANILA, Philippines–Metropolitan Waterworks and Sewerage System cannot use the forthcoming outcome of its arbitration with Manila Water as a basis whether to comply or not with an arbitral decision it lost to Maynilad.

“This is disappointing. MWSS lost its case against Maynilad but is saying in effect that its compliance will depend on the outcome of its arbitration with Manila Water which is completely separate and independent, although the issues are similar,” said Randy Estrellado, chief financial officer of Maynilad.

“If Manila Water loses, does that mean our win will no longer matter? This possibility alone of opposite arbitral results shows the two cases are independent of each other,” he said.

But MWSS, Estrellado said, claimed this confuse consumers since a Manila Water loss would mean a rate reduction.

“In the first place, it was MWSS that started it all. They confused us by changing the rules midstream, hence our recourse to arbitration. But is its fear of consumer confusion a valid reason to ignore a perfectly legal decision?” he asked.

The arbitral decision is supposed to be final and executory. “MWSS has no choice but to approve the new water rates. But without the MWSS board approval, we cannot publish them before implementation,” he said.

To cushion the impact of the rate hike, Maynilad volunteered, subject to MWSS board approval, to spread it out over the next three years. For customers using 10 cubic meters or less, the impact on the basic rate per cubic meter is minus P0.14; up to 20 cubic meters, plus P0.64; up to 30 cubic meters, plus P1.23.

Estrellado said MWSS’ defiance to implement the arbitral decision, which is final and binding on the parties, could jeopardize government efforts to entice foreign investments, especially with road shows scheduled abroad this year.

The sanctity, stability and enforceability of contracts are important to a foreign investor, he said. “MWSS is signaling exactly the opposite.”