Maynilad hoping for ‘early’ conclusion to water deal review
WEST ZONE water supplier Maynilad Water Services, Inc. said it is hoping for a conclusion to the review of its concession agreement with the government “as soon as possible.”
At a virtual briefing Thursday, Maynilad President and Chief Executive Officer Ramoncito S. Fernandez said the company has started formal communications with the government on the new agreement, adding that he expects a fair and reasonable review.
“As far as the timetable is concerned, I do not have any projection or forecast for when it would be finished. But Maynilad is expecting it to finish early so that we can continue all the programs for the long-term water supply and improvement of services to Metro Manila,” Mr. Fernandez said.
“We are just hoping that it will be finished as soon as possible so that we can implement the plans we have laid out in our concession,” he added.
Mr. Fernandez had no further comment on the negotiations, other than to say that the company’s position has been affected by events such as the COVID -19 pandemic.
“These factors have affected our decision. Let’s leave it at that. Then we will go to talks with the government and that is part of what we will have to discuss,” Mr. Fernandez said.
Justice Secretary Menardo I. Guevarra has announced that a copy of the revised water deal with east zone water provider Manila Water Co., Inc. was sent to Maynilad. The government is awaiting a response.
On March 31, Mr. Gueverra confirmed that the government, represented by the Metropolitan Waterworks and Sewerage System, signed a revised water concession agreement with Manila Water.
Under the new agreement, Manila Water is not allowed to pass on corporate income tax to customers and implement foreign currency differential adjustments.
Manila Water will also implement a tariff freeze until Dec. 31, 2022 as part of the new water deal, to help consumers weather the pandemic.
Asked about the upcoming end to the current five-year rate rebasing period in 2022, Mr. Fernandez said the company cannot start with a clean slate in terms of the staggered rate increases it was due to implement during the period.
“Hindi puwede iyon. (It cannot be.) We have investments in the past and they have to be considered,” Mr. Fernandez said.
Mr. Fernandez confirmed that the company has started drafting its five-year plan for the next rate rebasing period.
“We have started actually. As in any five-year plan, it requires a lot of planning and data — also checking the actual results of what we have started,” Mr. Fernandez said.
Maynilad and Manila Water deferred their approved rate hikes for 2021 under the current rate rebasing period to show solidarity with consumers. They also did not implement rate hikes in 2020 under pressure from the administration, which considers their original concession agreements to be onerous.
Maynilad provides water to Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas, Malabon, Manila, Makati, and Quezon City, as well as parts of Cavite province including Bacoor, Imus, Kawit, Noveleta, and Rosario.
Metro Pacific Investments Corp., which has a majority stake in Maynilad, is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc.
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