A SENATOR has proposed extending the revised concession deal of the two water distributors in the capital to synchronize it with the franchise that, if approved, would be valid until 2046.
The revised concession agreements signed by the government separately with private utilities Manila Water Co., Inc. and Maynilad Water Services, Inc. will expire in 2037.
At Wednesday’s Committee on Public Services hearing on the franchise, Senate Majority Leader Juan Miguel F. Zubiri said changing the concession agreements’ validity period would benefit consumers as it would mean more stable tariff rates.
He noted that if the current concession agreements end in 2037, a bidding for the distribution contracts will have to be undertaken, which could translate to an increase in rates to about P103 per cubic meter (/cu.m.) from P67/cu.m.
The two concessionaires backed the proposal.
Maynilad President and Chief Executive Officer Ramoncito S. Fernandez said an extension would help in terms of their financing requirements and ease the tariff adjustments necessary to recover long-term investments.
“The longer recovery period translates to a lower tariff,” said Manila Water Director Donato C. Almeda in the same hearing. “We fully support that.”
The proposed revisions will have to be sent to the Metropolitan Waterworks and Sewerage System’s (MWSS) board, whose members were absent in the hearing. The MWSS oversees the privatized water distribution system in the capital and some surrounding areas.
Senator Mary Grace S. Poe-Llamanzares, chair of the committee, lambasted the MWSS board, particularly Vice-chair and Administrator Reynaldo V. Velasco, for skipping the hearing.
“We’ve had hearings in the past and there’s actually a law saying that whoever is the head of the department has the responsibility and the burden of response. It’s really difficult to be conducting these hearings at such a very important matter when your head of agency is not even present,” Ms. Poe-Llamanzares said.
“It would have been better if a member of the board was present here today to at least give legitimacy, and if not that, to show their actual endorsement and sincerity in approving this agreement,” she said.
Ms. Poe-Llamanzares said the proposed extension will have to be finalized before deciding on the franchise.
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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