By Victor V. Saulon
A QUEZON CITY COURT has granted the petition of Maynilad Water Services, Inc. for enforcement of an arbitral award granting a tariff hike after the Metropolitan Waterworks and Sewerage System (MWSS) refused to implement the same.
“This decision confirms that the concession agreement works, and restores investor confidence in the public-private partnership program of the government,” Maynilad President Ramoncito S. Fernandez said on Thursday in separate disclosures of the utility’s controlling stakeholders Metro Pacific Investments Corp. (MPIC) and DMCI Holdings, Inc.
“This also ensures the continued implementation of Maynilad’s capital expenditure projects that are intended to benefit further our customers.”
The disclosures said the decision by the Regional Trial Court (RTC), Branch 93 of Quezon City granted the petition on Aug. 30, 2017.
The petition was filed in July 2015 after the refusal of MWSS and its Regulatory Office to implement the Dec. 29, 2014 final award that resulted from arbitration between Maynilad and the regulator.
The final award upheld the 13.41% rebasing adjustment that Maynilad proposed for the fourth rebasing from Jan. 1, 2013 to Dec. 31, 2017.
MWSS did not immediately respond to a request for comment on its next move after the court decision.
Erik S. Dy, spokesperson of Solicitor General Jose C. Calida, declined to comment, saying: “The Office of the Solicitor General has yet to receive a copy the RTC decision.”
Shares of MPIC yesterday closed down 0.29% at P6.77 apiece, while those of DMCI rose by 1.97% to end P16.60 each.
Maynilad, however, said MWSS may yet question the ruling with the Court of Appeals within 15 days of receiving a copy.
“Once the RTC decision confirming the final award and ordering its immediate implementation becomes final and executory, Maynilad’s 2017 average basic charge would increase by 9.89% which represents the balance of the 13.41% rebasing adjustment that has yet to be implemented,” Maynilad said.
The company said the adjustments will translate to an average increase of P3.41 per cubic meter (/cu.m.) to the 2017 average basic charge of P34.51/cu.m.
Maynilad said households with monthly water consumption of up to 10 cu.m. will see an increase of P11.56 in their monthly bill, to P130.18 from P118.61. Those with monthly water consumption of 20 cu.m. will see a P43.76-per-month hike to P488.05 from P444.29.
“Residential customers who consume 20 cu.m. per month constitute 29% of our total billed services,” Jennifer C. Rufo, Maynilad officer-in-charge for corporate communications, said, adding that “[t]he RTC decision is still appealable.”
“The MWSS has 15 days from receipt of the decision to file its appeal.”
The company said in the disclosures that “[i]f and when implemented, the tariff increase would also ameliorate Maynilad’s claim against the Philippine Republic for an ongoing revenue shortfall in this respect, as recently determined by a three-man arbitral tribunal that unanimously upheld Maynilad’s claim against the Philippine Republic.”
A separate arbitral tribunal last July 24 ordered the government to reimburse Maynilad at least P3.425 billion for losses incurred from Jan. 1, 2013 to March 10, 2015 from delayed implementation of its rebased water rates. The tribunal ruled that Maynilad is entitled to recover from the Republic its losses from Sept. 1, 2016 onwards.
MPIC is one of three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls.
An employee of Maynilad Water Services, Inc. checks meters in this undated photograph which the utility e-mailed to journalists on Aug. 8. Maynilad has been pressing the government to implement a Dec. 29, 2014 arbitral ruling that upheld its tariff hike, as well as a July 24 decision on compensation for at least P3.4-billion losses from delayed implementation.