October 26, 2014     Philippines
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June 14, 2013
Metro Manila experience: Poor water service, unjustified rate hike petition

“In the allocation of water resources, there should be preferential treatment and affirmative action for the poor and marginalized sectors.” – The Filipino People’s Water Code

By IBON FOUNDATION

IBON Features — The petitioned water rate hike by Metro Manila water companies is still being reviewed but 42-year-old Malou Lopez is almost certain that the price of water in their community will increase even before any official declaration on new rates is announced.

Like most residents of Sitio San Roque, Barangay North Triangle, Quezon City, Aling Malou pays a total of Php34 per day for 16-liter pails of water for cleaning and 10-gallon jugs of drinking water. Water is fetched from the community pump and from a sub-connection faucet in the area. During summer, water expenses in each household can reach Php120 per day. The cost is heavy, especially for Aling Malou whose husband, a construction worker, earns only Php200-400 daily.

“Nakakapagod isipin (It is tiring just to think about it),” Aling Malou said at the thought of the possibility of water rates rising further in the coming months. Water firms Maynilad and Manila Water have submitted their proposed rates as part of the scheduled rate rebasing process. According to the Metropolitan Waterworks and Sewerage System (MWSS), the rate rebasing review will be concluded by end-June this year. Manila Water petitioned to increase its basic charge by Php5.83/cubic meter (cu.m.) while Maynilad is seeking an Php8.58/cu.m. increase (revised from its original petition of P10.30).

Inaccessible, unaffordable water

Aling Malou and other San Roque residents resorted to fetching water from the community pump after years of waiting for a direct water connection. Initially, Manila Water Company representatives encouraged the residents to revive an old, abandoned connection from the bunch of meters connected to the area. According to the company, applicants need only to pay the arrears of old account so that it can be reactivated. However, the arrears totalled to around Php250,000, an amount that was unaffordable for any family in San Roque. Connecting to an existing sub-meter is also an expensive option since they had to pay around Php1,500 for PVC pipes, a Php650 sub-meter and a Php150 faucet. But the most costly expense is the Php75/cu.m. bill that they have to pay once the water service is connected.

In the same barangay, Nanay Inday Bagasbas and other families in Balicanta St. said that they already find it difficult paying for water. Without their own individual connections, residents have to fetch water and pay around Php60 daily. According to Nanay Inday, to be able to connect to a sub-connection, a family has to pay Php1,300 to connect to a mother meter that provides bulk water from Manila Water. Once water service is connected, the household then pays Php60-70/ cu.m. of consumption. Their monthly bills run from Php800 for a household of three, up to Php1,700 for a household of nine.

“Siguradong lalo kaming mahihirapang mag-budget kapag tumaas ang singil (A water rate increase will surely make budgeting more difficult),” Nanay Inday said.

The situation is similar in other Metro Manila areas. In Tondo, the roughly 500 tenement families of Sambahayan A, B and C in Moriones spend Php18-53 daily on water rationed in containers. Each building sources water daily through a hose from a single Maynilad connection, which is under the account of the local government. Residents, most of them earning Php200-300 daily, have to cut back on their use of water because of the cost. Also, without individual water connections in each unit, residents’ health and sanitation are affected.

In Palar Village in Taguig City and Barangay Pansol in Balara, many residents also source their water through sub-meter connections from Manila Water bulk water. These are provided by private middlemen who impose higher fees on the already expensive charges of the water firm.

Other IBON case studies show that residents who fetch water from bulk actually spend more for their water service than households with individual connections. In many of the cases, residents with sub-connections pay as high as Php800/month for water service, while residents who fetch water in containers spend as much as Php1,800/month. They pay higher than most of the residents with individual connections that were interviewed, whose water bills amount to around Php300-600/month.

Aside from unaffordable water rates, residents from areas with bulk water connections and deep wells also narrated various other water-related problems. These range from weak water pressure, immediate disconnection after only a few days of unpaid bills, long lines to community water pumps, among others.

Key performance indicators?

Water service efficiency and affordability were among the reasons cited by government and the water companies for privatizing the Metropolitan Waterworks and Sewerage System (MWSS) 16 years ago. Yet, the experience in many areas in Metro Manila shows that these promises remain unmet. In fact, efficiency and affordability have not been monitored next to setting rates for the various uses of water.

The San Roque, Pansol, Moriones and Palar cases are just a handful in the lot reported by water concessionaires as areas covered by their services. Yet, the official 99% and 92% coverage reports in 2012 by Manila Water and Maynilad, respectively, do not speak of the quality of water service that they provide. Manila Water also reported 204,270 water service connections “extended to the urban poor” as of 2012, while Maynilad reported 269,896 as of 2009. Still, it is unclear whether these coverage reports have offset the number of families without access to safe water in Metro Manila, which increased since MWSS privatization, reaching a total of 204,036 as per the 2008 Annual Poverty Indicators Survey. It also does not state if these are individual 24/7 connections, which are usually not the case in many urban poor areas.

Moreover, the two water companies have, by far, fared poorly in sewer and sanitation coverage – Manila Water at 12% and 35%, respectively, and Maynilad at 8% and 34%, respectively.

Rate hike unjustified

Rate rebasing is the process stipulated in the Concession Agreement between government and the two water companies by which water rates are determined every five years. To compute periodic water rates, the MWSS reviews the justifiability of water companies’ past reported and future projected expenses throughout the concession period, the sum of which is spread accordingly throughout the companies’ operation period and customers’ monthly bills.

This is the premise of Manila Water and Maynilad petitioned rate hikes. The bottomline of water rates determination in the privatization framework is the companies’ investment recovery. Nowhere are consumers’ economic capacities taken into consideration. The classification of rates according to use does not even come close to socialized rates, as seen in the experience of bulk water connections which are bound to be charged commercial rates upon reaching a high level of consumption.

The United Nations Special Rapporteur on the human right to safe drinking water and sanitation Ms. Catarina de Albuquerque reminded UN members that: “Government regulation must be biased for ensuring the right to water of the people. The State is obliged to progressively realize the right to water and sanitation. In the context of non-State service provision, this requires ensuring meaningful participation and access to information in the decision to delegate services to non-State actors… The State must put in place a regulatory framework to ensure compliance with human rights standards, as well as complementary social policies, for instance to ensure the affordability of services, where needed…”

It is crucial to pinpoint that the privatization framework has so far not delivered public utility and social services efficiently and affordably in any part of the world, to the extent that it has even been declared illegal in France, home to one of the biggest private water consortiums worldwide. In the Philippines, as this period’s rate rebasing is soon to reaffirm recovery and profitability for private water concessionaires, people’s continued resistance to water privatization and efforts to push more publicly participative, pro-people management of water resources and services are to be expected. IBON Features

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