Maynilad open to settlement of case vs MWSS

Maynilad Water Services Inc. is willing to drop claims from the government that have now accumulated to nearly P20 billion in foregone revenue due to the non-implementation of a decision made by an international arbitral panel.

“We’re trying to settle that [and it] is being discussed with the Metropolitan Waterworks and Sewerage System,” Maynilad chair Manuel V. Pangilinan yesterday told reporters. “On our part, we also do not want to be in that situation with the government.”

Pangilinan said the company was amenable to a settlement provided that both parties would agree on a tariff structure.

“We (Maynilad) are more than willing to drop the arbitration case, subject to agreement with the government on how we will move forward with the tariff issue,” he said.

Asked why settlement is an option for Maynilad, Pangilinan said: “This has been pending for so long, we just want to settle it.”

The dispute stemmed from Maynilad’s insistence that it was allowed to recover from customers the cost of corporate income tax, to be passed by way of water rate hikes for 2013 to 2017.

The MWSS Regulatory Office did approve rate hikes, but lower than what Maynilad had applied for, as the regulator disallowed recovery of the income tax.

Maynilad sought arbitration at the International Chamber of Commerce in Singapore. In September 2017, the three-member arbitral panel unanimously decided in favor of Maynilad.

With the refusal of MWSS to implement the arbitral decision, Maynilad brought the matter to the local court and the matter is now pending at the Supreme Court.

Maynilad is claiming a total of 19.6 billion in reparations from the government, covering revenue losses due to the non-implementation of the arbitral decision, including cost of money—P8.2 billion in 2016 and P11.4 billion in 2017. This does not include revenues lost in 2018.

In another development, Maynilad inaugurated its Putatan No.2 Treatment Plant in Muntinlupa City.

Putatan 2 costs P5.4 billion and has a capacity to process up to 150 million liters of raw water from Laguna de Bay per day of operation.

Maynilad has a commitment to sell to Manila Water Co. Inc. up to 50 MLD, to help stave off the supply shortage in Manila Water’s concession area.