MWSS, MWC talks on final stretch | Inquirer Business
Close  

MWSS, MWC talks on final stretch

Regulator to wait for decision before acting on Maynilad plea

Regulators on Friday clarified that the arbitration with Manila Water Company Inc. was “nearing its conclusion,” insisting on waiting for a decision before acting on Maynilad Water Services Inc.’s move for a tariff hike.

“(B)oth arbitrations involve identical issues—whether or not the concessionaires are public utilities, and whether or not they may pass on their corporate income tax to the consumers,” said Joel C. Yu, chief regulator at the Metropolitan Waterworks and Sewerage System.

ADVERTISEMENT

Maynilad has repeatedly slammed the MWSS for sitting on its motion, noting that an appeals panel with the International Chamber of Commerce had issued a decision at the start of the year.

The concessionaire claims it was incurring P208 million in opportunity losses for every month that it could not implement the rate hike.

FEATURED STORIES

In January, Maynilad’s major stockholders announced that arbiters had decided in its favor, awarding an average increase of P3.06 per cubic meter on top of the current basic rate of P31.28 cubic meters.

The increase is supposed to cover the five-year period that started in January 2013.

On Friday, Yu said in a statement that the claims of losses “cannot be substantiated.”

“Assuming there is in fact a shortfall in Maynilad’s recovery of its investments, the same will be addressed by way of a rate adjustment in a future rate rebasing exercise,” he said. “There is no lost revenue, in effect. That is the model under the concession agreement and we are faithfully observing it.”

As for having to wait for a decision on Manila Water, Yu said Maynilad’s new rate rested on the panel’s finding that Maynilad was not a public utility and that its income tax cannot be recovered from its customers.

“On the other hand, a contrary finding in the other arbitration case will lead to the opposite result,” Yu said. “Simultaneously enforcing these contradictory rulings will immediately give rise to an absurd scenario.”

He said such scenario involves Maynilad bearing the burden of the company’s income tax, while Manila Water consumers are relieved of a similar burden altogether.

“No responsible regulatory agency of government can or should allow that,” Yu added.

Read Next
Don't miss out on the latest news and information.

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Business, Manila Water Company Inc., Maynilad, MWSS, regulators, tariff rate, water rates
For feedback, complaints, or inquiries, contact us.

Curated business news

By providing an email address. I agree to the Terms of Use and
acknowledge that I have read the Privacy Policy.



© Copyright 1997-2022 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.