Bu-lat-lat (boo-lat-lat) verb: to search, probe, investigate, inquire; to unearth facts Volume IV, Number 9 March 28 - April 3, 2004 Quezon City, Philippines |
GMA
Faces New Suit Over Maynilad Bailout Like
a troubled ship in the high seas, the Macapagal-Arroyo government is facing a
wave of charges for alleged midnight deals, appointments and election cheating.
If any of the seven graft cases that have been filed so far succeed, Macapagal-Arroyo
may kiss her presidential bid goodbye come May 10. By
Alexander Martin Remollino Like
a beleaguered ship in the high seas, the Macapagal-Arroyo government is facing a
wave of charges for alleged midnight deals, appointments and election cheating.
If any of the seven graft cases that have been filed so far succeed, Macapagal-Arroyo
may kiss her presidential bid goodbye come May 10. And
now this one. A
broad coalition of political groups is set to file charges against the Macapagal-Arroyo
government in connection with the debt-to-equity deal between the Metropolitan
Waterworks and Sewerage Systems (MWSS) and the Lopez-owned Maynilad Water
Services, Inc. that took effect last March 18. The
legal action was announced March 26 in a news conference in Quezon City by the
Water for the People Network. The network is composed of Bagong Alyansang
Makabayan (Bayan), Ibon Foundation, Confederation for the Unity, Recognition and
Advancement of Government Employees, Kilusang Magbubukid ng Pilipinas (KMP –
Peasant Movement in the Philippines), Cordillera Peoples’ Alliance, Center for
Environmental Concerns (CEC), Kalikasan-People’s Network for the Environment,
the Gabriela women’s alliance, Kalipunan ng Damayang Mahihirap (Kadamay –
urban poor alliance), and community-based organizations. Earlier,
Alyansa ng Pag-asa senatorial bet Melanio “Batas” Mauricio, Jr. had filed a
case against the government over the same MWSS-Maynilad deal. In
the news conference, Arnold Padilla, IBON Foundation’s advocacy officer on
water, said the charges are being prepared with their lawyers. “We are
preparing our documents carefully because we don’t want to file a haphazard
case,” he told reporters. Bailout
The
debt-to-equity deal between MWSS and cash-strapped Maynilad converts some P8
billion in unpaid concession fees into a 61-percent government stake in the
water company. Under the agreement, the Lopezes’ foreign corporate partner,
the French company Suez through Ondeo Philippines will remain part owner of
Maynilad with a 19-percent share. Benpres Holdings, which used to control
majority shares, will continue managing the water company. Ondeo previously
owned a 40 percent share in Maynilad. Maynilad,
which obtained the MWSS concession for its west zone in 1997, stopped paying its
concession fees in March 2001. Even so, it has not stopped collecting from
customers the Foreign Currency Differential Adjustment and the Accelerated
extraordinary Price Adjustment, mechanisms which enable it to recover
foreign-exchange losses related to the concession agreement. Macapagal-Arroyo
last week defended the government “take-over” of Maynilad as being in the
interest of consumers. “We are doing this because we cannot sacrifice the
providing of water for the people,” she told reporters during one of her
campaign sorties. Likewise,
Justice Undersecretary Manuel Teehankee has claimed that consumers will benefit
from the deal. This has been echoed by presidential spokesperson Ignacio Bunye,
who described the MWSS-Maynilad agreement as “a win-win deal.” Outstanding
debts But
Bayan and Ibon Foundation reveal that under the debt-to-equity deal, the
government had also agreed to shoulder Maynilad’s outstanding debts amounting
to some P11 billion. The
Water for the People Network, in a statement released to the media last March
21, has also disclosed that to enable Maynilad to pay its outstanding debts, the
government will allow the water company to raise its rates by 32 percent. Since
it took over the metropolitan west zone in 1997, contrary to government promises
of lower water rates under privatization, Maynilad has increased its rates by
226 percent—while the Ayala-owned Manila Water Company has hiked its rates by
350 percent - studies by Ibon Foundation revealed. Anakpawis
party-list nominee Carmen Deunida, who does laundry work for a living, also
assailed the government’s shouldering of Maynilad’s debts. In a statement
last March 26, Deunida said: “Maynilad is a private business corporation, and
the Lopezes are entrenched business monopolists. They know the risks of the
business. They have no right to pass on their debts to the government; and for
its part, this government has no right to pay for these debts using taxpayers’
money.” The
Water for the People Network has termed the MWSS-Maynilad deal as a bailout,
which Maynilad chairman Oscar Lopez has denied. “How can it be a bailout when
the Lopez Group is completely writing off its equity investment of $80
million?” Lopez asked in a statement recently issued to the media. Reacting,
the Network said: “If we convert the $80 million in equity investment, its
peso equivalent is only P4.5 billion. This amount is not enough to pay for its
P8-billion debt to the government. “The Lopez family should be ashamed of
themselves if they ask for a reimbursement!” On
the other hand, Bayan spokesperson Renato Reyes, Jr. has called the
MWSS-Maynilad agreement a “sweetheart deal.” Sen.
Loren Legarda, a vice presidential bet of the Koalisyon ng Nagkakaisang Pilipino
and a host of one of the programs of the Lopez-owned ABS-CBN, has described the
deal as one that “stinks to high heavens.” Mismanagement
The
Maynilad chair has also denied that the water firm was mismanaged. “We are not
leaving a desolate and financially unsound company as the misinformed wish to
believe,” said Lopez, “and definitely, there was no mismanagement of the
water utility.” But
by its own admission, Maynilad’s total liabilities amount to some P19.1
billion as of December 2003, while its assets reach only P16.9 billion.
“Maynilad sought corporate rehabilitation because it is desolate and
financially unsound,” the Water for the People Network avers. The
Network adds: “Maynilad has been mismanaged from the start as Benpres and Suez
made the concession a milking cow. From 1997 to 2001, it overshot its projected
expenses by around P800 million due to questionable expenses.” To
illustrate, the water firm has been outsourcing its consultancy and management
development to firms associated with Benpres and Suez. From 1999 to 2000 alone,
it spent P1.2 billion for such services. It has also been importing computers,
brass fittings for water meters, etc. from French companies affiliated with
Suez.” The
Water for the People Network has also refuted Maynilad’s claims of having
accomplished a lot in its six and a half years. According to the network, more
than 43 percent of Maynilad’s customers do not enjoy a 24-hour water supply,
while some 1.5 million people in its service area have no water supply at all. The
network further notes: “The outbreak of water-related diseases in Tondo, which
claimed the lives of several people and hospitalized many others, was due to
Maynilad's failure to repair and improve its infrastructures.” Campaign
Meanwhile,
Bayan and the other organizations in the Water for the People Network are set on
a campaign against the MWSS-Maynilad deal. They are demanding a complete
government take-over of Maynilad and the scrapping of the privatization policy,
which was started by the Ramos administration in accordance with International
Monetary Fund-World Bank prescriptions. Preparations
are being made for various campaign activities, including petition-signings in
communities. “In
the final analysis,” said Reyes in a statement, “it is the people who will
suffer the most from the ‘sweetheart deal’ as they will be the ones who will
pay for the rehabilitation and debt payments of Maynilad.” Deunida, for her part, said: “Privatization is killing the people.” Bulatlat.com We want to know what you think of this article.
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