October 23, 2014     Philippines
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July 9, 2013
‘Why let water firms charge all their expenses plus profits to consumers?’ groups ask Aquino

“There are more than enough grounds for the rates to go down if regulators will really disallow the charging of questionable items such as the income taxes of the two water concessionaires.” – Renato Reyes, Bayan

By MARYA SALAMAT
Bulatlat.com

MANILA – Shortly before the first public consultation on water rate rebasing began last month – with the proposed rate hikes by Maynilad and Manila Water on the table – the head of MWSS assured the public in a DZRH interview that as government regulator, they are studying carefully the papers and figures being submitted to them by the said private water concessionaires. But apparently, their careful study has still allowed the private water companies to dip deeper into the people’s pockets through various charges, some questionable, on peoples’ water bill.

“We are paying for every expense of these water companies,” said Renato Reyes Jr., secretary general of Bagong Alyansang Makabayan (Bayan). The group trooped to the main offices of Manila Water and Maynilad in Quezon City last Friday, calling the companies “greedy” and spray-painting its roadside logo.

Members of Bayan, KMU, Piston, All-UP Workers Union, UP-Balara community residents march Jul 5 to the gates of main offices of Maynilad, Manila Water and MWSS (Photo by M. Salamat / bulatlat.com)

Members of Bayan, KMU, Piston, All-UP Workers Union, and UP-Balara community residents march Jul 5 to the gates of main offices of Maynilad, Manila Water and MWSS (Photo by M. Salamat / bulatlat.com)


At the gates of the private water companies, members of the Philippine National Police and company security personnel stood guard with guns, truncheons, shields, radios and video equipment.

Members of the Quezon City Police Department showed protesters that they were making a list of the names of their leaders and organizations. At the same time, company security personnel were also taking videos and photos of the protesters.

Felix Pariñas, national president of All-UP Workers Union, decried the “exploitation” consumers are being subjected to as they are made to pay for all the investment costs of these water companies while wages remain low and water companies are reaping huge profits.

Earlier, advocacy group Water for the People Network (WPN) has revealed that Maynilad and Manila Water have been passing on to their customers the costs of their income taxes. From 2008 to 2012 the WPN estimated the costs of these passed on income tax at P15.31 billion ($356 million).

Maynilad and Manila Water “make us pay for their taxes, donations, advertising and promotion, entertainments, travels abroad, even their flowers,” Reyes of Bayan added.

“It’s such a shame that the police are protecting thieves such as these water concessionaires,” Reyes said.

Calling Maynilad and Manila Water 'greedy,' protesters demanded the scrapping of concession agreement that 'legitimizes such greed.'  (Photo by M. Salamat / bulatlat.com)

Calling Maynilad and Manila Water ‘greedy,’ protesters demanded the scrapping of concession agreement that ‘legitimizes such greed.’ (Photo by M. Salamat / bulatlat.com)


Maynilad and Manila Water (respectively controlled by business groups led by Manny Pangilinan and the Ayala family) took over from the Philippine government since 1997 the job of distributing water to the now 14.2-million Metro Manila consumers. In the takeover, what used to be a public service was turned into a business, a very profitable business for both Maynilad and Manila Water. Water rates have increased more than seven times since the takeover. According to the Water for the People Network, the consumers are being billed not just for the cost of distributing water but also for other expenses that ordinary businesses are supposed to shoulder. Consumers are also being billed for planned projects that did not push through.

No justification for rate hike

Manila Water is seeking a P5.83-per cubic meter ($0.14) increase in its basic charge while Maynilad is asking for an increase of P8.58 ($0.20) per cubic meter. But according to Bayan, there is no justification for the water rates to increase. On the contrary, “there are more than enough grounds for the rates to go down if regulators will really disallow the charging of questionable items such as the income taxes of the two water concessionaires,” Reyes said. He added that a refund is in order.

“You MWSS are government employees. Your salary is being paid by the public. Do your job; remove from our bills those that should not have been charged to us, and refund us the overcharged amount over the years,” Reyes told the MWSS during their protest in front of its gates.

The trouble, it appears, stems from the onerous provisions of the privatization contract, or the water concession agreement. The provisions of this agreement, which are disadvantageous to the public, the WPN said, should be changed or revised or reviewed by the Aquino government. The problem, it said, is that it appears the Aquino government has no intention of doing so.

Among the members of Aquino’s Cabinet are two former presidents of these water companies. Jose Rene Almendras, former head of the Department of Energy, was appointed recently as Secretary to the Cabinet. Before being appointed by President Aquino, he was the president of Manila Water. Rogelio Singson, who currently heads the Department of Public Works and Highways, was the president and chief executive officer of Maynilad before being appointed by President Aquino.

“It is impossible that Aquino does not know about these unjust policies such as the practice of private water concessionaires of making consumers pay their income taxes, travel expenses, junkets, gifts, among others,” said George San Mateo, national president of Piston.

Consumers slam President Aquino's 'collusion' with water companies (Photo by M. Salamat / bulatlat.com)

Consumers slam President Aquino’s ‘collusion’ with water companies (Photo by M. Salamat / bulatlat.com)


San Mateo called for the scrapping of the concession agreement that allows for those onerous charges. He stressed that the MWSS is accountable for this, and President Aquino could not excuse himself by saying that it was just handed over to his administration. They have sat on it for three years,” San Mateo said.

Aquino dared to speak up, act on onerous charges of water companies

“Why is Aquino silent? Why does he seem afraid to confront these large greedy companies? Is it because these companies funded his campaign? Does he need their support for 2016?” asked Reyes of Bayan during their protest in front of Maynilad. He concluded that “Aquino’s silence on the matter is deafening.”

Residents of nearby communities also joined the Bayan protest. They told Bulatlat.com that for many in their community called Pansol, which lies near the main offices of Maynilad and Manila Water, water is a precious, costly commodity. They said it is worse for the unemployed among them because they cannot pay for or maintain their direct water connection and they are thus forced to buy water. But the water they buy passes through middlemen resulting in increases in its price and its vulnerability to contamination. This is also another manifestation of the failure of privatization, the WPN said.

“Amid the numerous anomalies in our water bills that have been unearthed, let us not forget that the root of all these is the privatization of MWSS, which transformed the provision of water services into a highly lucrative risk-free business,” said Reyes of Bayan. He urged the public to support calls for the government to terminate the concession agreements now. (http://bulatlat.com)

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