MWSS approves hike in water rates
Customers of Maynilad Water Services, Inc. (Maynilad) and Manila Water Corp. (MWC) will see an upward adjustment in their monthly billing starting July after Metropolitan Waterworks and Sewerage System (MWSS) allowed these companies to jack up their respective water rates.
This was announced by MWSS Chief Regulator Patrick Ty, who said the MWSS-Regulatory Office (RO) approved on Thursday the application of Maynilad and Manila Water for Foreign Currency Differentials Adjustment (FCDA) adjustment for the third quarter.
Approved every quarter, FCDA is a tariff mechanism granted to utility companies to allow them to recover losses or give back gains arising from the fluctuating movements of the peso against other currencies.
This, since utilities have to pay foreign-dominated concession fees to MWSS, as well as dollar-denominated loans, which they used to fund their projects.
For the third quarter, the approved FCDA adjustment of R0.99 per cubic meter (/cu.m) for Manila Water and R0.06/cu.m for Maynilad will increase the cost of water to residential customers. The overall impact for Manila Water residential customers consuming 10 cu.m or less would be R5.21 per month, while those consuming 20 cu.m or less would experience an increase of R11.51 per month.
Those consuming 30 cu.m would have to bear an increase of R23.59 per month.
As for Maynilad customers, those consuming 10 cu.m a month will see an increase of R0.23, while those consuming 20 cu.m will feel a R0.86 increase in their monthly billing. A R1.75 increase will be felt by those consuming 30 cu.m.
It was almost two weeks ago when both Maynilad and Manila Water confirmed that they have both submitted the application for their FCDA adjustments, which was higher because of peso depreciation.
The last FCDA adjustment was executed in April wherein lower rates were applied.
During that time, the reason for the rollback was the appreciation of peso vis-à-vis the US dollars.
Aside from the FCDA adjustment, water rates might even go higher in August due to a pending rate rebasing, which Maynilad and Manila Water are both entitled to every five years.
Rate rebasing determines the level of rates for water and sewerage services that permits the concessionaires to recover over the life of their concession or until 2037.
Adjustments to be made under this mechanism are based on the performance, expenses, earnings, unrecovered investments and service improvement plans of the water concessionaires.
The results of the rate rebasing are expected to come out in July and will take effect by August.
Ty earlier said that even if final figures for the rate rebasing is still being reviewed, water tariff rates are likely to increase since the total cost needed by the concessionaires for sewage projects in the next 20 years will reach R250 billion.