Manila Water seeks billions in compensation for water rate losses

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The Manila Water Co. Inc. is seeking compensation for financial losses seen to result from having to reduce water rates in line with an arbitration court ruling against the Ayala-led company.

The company said in a statement it has filed a Notice of Claim to the Department of Finance, asking the government to indemnify losses estimated to be over P79 billion from 2015 to 2037.

Recently, an appeals panel upheld the position of the Metropolitan Waterworks and Sewerage System (MWSS) to declare Manila Water as a public utility.

The MWSS position changed the fundamental character and rate of return of Manila Water as contained in the original intent of its concession agreement (CA) with government.

“The position of MWSS, as upheld by the Appeals Panel, diverges from the original intent of the CA and the representations of National Government in 1997. We now claim against this primary obligation of the National Government to account for the impairment caused by this change,” Manila Water president and CEO Gerardo C. Ablaza, Jr. said.

Manila Water will implement a decrease of P2.77 per cubic meter, an 11.05 percent reduction in the average basic charge of P25.07 per cubic meter. The new rates will be implemented in tranches: negative P1.66 per cubic meter in 2015, negative P0.55 per cubic meter in 2016 and negative P0.55 per cubic meter in 2017.

Separately, a 4.19 percent adjustment for inflation will also be made to the basic water charge in 2015 equivalent to P1.08 per cubic meter. Annual CPI (consumer price index, to account for inflation) adjustments will continue to be made consistent with the CA.