Maynilad presses gov’t on recovery of tax expenses
Maynilad Water Services Inc. is going for a third arbitration case with the Metropolitan Waterworks and Sewerage System (MWSS) for the latter’s continued failure to allow the concessionaire to recover tax expenses through a rate increase.
“We recently filed a dispute notice with the MWSS, as the tariff adjustment that was granted for the 2018 to 2022 rebasing period still excludes the recovery of corporate income taxes (CIT),” the company said in a statement.
In September, the MWSS Regulatory Office announced that it has approved an increase in Maynilad’s basic charge of P5.73 over the next four years, which cover the current rate rebasing period.
The MWSS yesterday announced its Regulatory Office has made a decision on Maynilad’s proposed business plan for the regulatory period which covers up to 2022.
MWSS chief regulator Patrick Ty clarified that the new rates did not include recovery of CIT.
“The MWSS ruled in the previous rate-rebasing period that the CIT should not be included [to be charged to customers],” Ty said. “The concessionaires have challenged this in court, and it is still pending at the Supreme Court.”
Maynilad, citing its concession agreement with the MWSS, yesterday said the only way for the company to preserve its “entitlement to the recovery of CIT” was to go through arbitration.
“If we do not file a dispute notice, Maynilad would be construed to have waived its claim on the recoverability of CIT—a right that was affirmed with finality in our first arbitration with the MWSS,” Maynilad said.
“Our going to arbitration is merely to ensure that we will not be prevented from asserting our right to recover CIT,” the company added. “In all other respects, we intend to maintain our amicable relationship with MWSS, including abiding with our business plan and approved tariff schedule.”
Earlier this month, a ruling of the Supreme Court of Singapore that favored an arbitral decision that sided with Maynilad became final, bolstering the company’s P3.4-billion claim of compensation from the Philippine government for the regulator’s non-implementation of rate hikes with CIT recovery for the period March 11, 2015, to Aug. 31, 2016.
A second case, covering Maynilad’s claims on losses incurred from Jan. 1. 2013, to March 10, 2015, is still pending at the International Chamber of Commerce, which is based in Singapore.
