Water Rate Hike Hit, Group Says Increase Unjustified and Insensitive (PR)

News release
1 February 2011

The Water for the People Network (WPN) condemned the rate hikes implemented by private water concessionaires in Metro Manila, calling the increases unjustified and insensitive to the plight of ordinary consumers.

Starting this month, Manila Water Co. will charge P1.92 per cubic meter (cu. m) more on residential customers using at least 30 cu. m per month. Meanwhile, Maynilad Water Services Inc. will impose an additional P2.30 per cu. m for similar customers. The new rates mean that households using at least 30 cu. m will see their monthly water bill increase by at least P57.60 to P69 starting in February.

According to the WPN, consumers were not even informed beforehand, much less consulted, about the water rate hikes approved by the Metropolitan Waterworks and Sewerage System – Regulatory Office (MWSS-RO).

The group argued that the latest rate hike is unjustified because the private water concessionaires have yet to account for the questioned P1 billion they collected from consumers for unimplemented water and sewerage improvement projects.

It added that the increase is insensitive and blamed the MWSS-RO for not considering that the prices of other goods and services such as food, petroleum products, toll, transportation fares, etc have been going up since late last year.

The WPN said that while the adjustments form part of staggered increases being implemented by Manila Water and Maynilad for rate hikes approved in 2008, regulators should still have factored in the spate of price increases.

At the minimum, the WPN said, the MWSS-RO could have asked the companies to suspend the rate hike to mitigate the overall rise in prices. Water is such a fundamental daily need of the people and there must be effective government intervention in ensuring that it remains available and accessible, said the WPN. Unfortunately, the privatization of the MWSS has severely undermined such role of government.

The group noted that prior to the recent adjustments rates being charged by Manila Water have already grown almost eight-fold from its initial rates in 1997 when MWSS was privatized. Maynilad rates, on the other hand, have increased five-fold during the same period.

But aside from jacking up the rates and marginalizing the poor, Manila Water and Maynilad have failed to ensure universal access and 24/7 availability in their service areas. Less than 60 percent of 790,000 households in Maynilad’s service area have 24-hour water service while only 74 percent receive water at 7-pound per square inch (PSI) or stronger pressure. More than half (51 percent) of water allocated to Maynilad continues to get wasted because of leaks and pilferage.

Meanwhile, Manila Water, claims 99 percent water supply coverage in its service area but will not say how big the portion is with individual and direct household connection and those serviced by private water suppliers or “middlemen”. These areas served by a third party private contractor are often poor communities and most vulnerable to water supply disruption.

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