15 October 2001 | Manila, Philippines
GMA LOVES MAYNILAD AND MANILA WATER
Starting October 15, Maynilad will implement a P4.21 increase in the price of water per cubic water. Plus 10% environment tax and 10% VAT, the total increase will amount to more than P5. THIS IS JUST THE FIRST IN A SERIES OF INCREASES UNTIL 2005. It undersocres the greed of Maynilad and represents all that is unjust about the privatization policy of the Arroyo government.
Last June, Maynilad tried to foist a Memorandum of Cooperation (MOC) on the consuming public. The MOC contained many onerous provisions, among them, the permission for Maynilad to recover its foreign exhange losses within 18 months instead of 22 years (as stated in the original Concession Agreement). AKBAYAN and other groups such as the Freedom from Debt Coalition opposed the MOC because it violated the original bid and the regulatory process.
President Arroyo stopped the implementation of the MOC, probably to avoid negative publicity before her SONA last July. In the interim, a Special Study Team of the Cabinet Cluster on Public Services (Cluster G) was formed, composed of representatives of the NEDA, DSWD and the Dept. of Finance. The purpose of the team was to study the MOC, the water privatization set-up and thresh out a “compromise agreement”. Public hearings were held, counter-proposals were presented, etc. Nothing came out of these discussions. The counter-proposals were not even studied nor considered. THE ARROYO GOVERNMENT GRANTED MAYNILAD ALL IT ASKED FOR AND MORE. Through the MWSS Board, it has even agreed to include the onerous MOC provisions in amendments to the orginal contract!
Included in GMA’s gift package for Maynilad:
1. Maynilad’s right to recover its forex losses (1997-2000) within 18 months instead of 22 years.
2. Maynilad’s right to recover FUTURE forex losses starting January 2002 via the Foreign Currency Differential Adjustment (FCDA), another fancy name for the Auto-CERA. This means that every time the peso dips against the dollar, it will be reflected in a price hike.
3. Rate rebasing starting January 2001. This means another round of increases apart from the forex-related increases.
4. Unclear service targets. The amendments state that Maynilad will, in the next 3 months, draw up an “action plan” to detail its planned expansion targets. In effect, all previously set service targets can be changed, most likely lowered. Therefore, the price increases do not automatically translate into better service.
5. Flexible terms for the payment of Maynilad’s debts to MWSS (concession fee). Maynilad unilaterally decided to stop paying the concession fee. As of July 2001, its debt was at P1.2 billion. The new contract allows Maynilad to resume payment in February 2002.
6. Bridge funding. Maynilad is puportedly so financially unsound that govenrment financial institutions such as the Development Bank of the Philippines will have to lend it money. The government is shoring up the resources of a private investor!
This bonanza of favors was granted by the MWSS Board with the approval of the Special Cluster (mentioned above), the NEDA and by extension, the President. Director Dante Canlas, Secretaries Vicky Garchitorena, Datumanong and Soliman and President Arroyo should explain why they are bending over backwards for the Lopezes at the expense of consumers. Evidently, they have chosen to bail out Maynilad instead of ensure the integrity of the privatization program and look after the welfare of consumers at this time of economic crisis.
As for Manila Water, it has likewise set to impose a P1.20 increase in its areas, as well as its own set of amendments to its contract—without any public hearings, or any measure of transparency at all. NEDA has likewise approved the amendments.
As AKBAYAN has said time and time agains, amending the Concession Agreement is a bad precedent which negates the objectives of privatization. It allows corporate entities to bid low to acquire public utilities, then allows then to tamper with the set parameters later on. How sure are we that these are the last amendments? What if Maynilad pushes for further amendments in the next five years? What about the Regulatory Office? If price increases can be clinched through contract amendments, then the RO loses its mandate to validate if petitions for price hikes are justified. The MWSS Board, by the way, will serve termination notices to the Regulators today.
If Maynilad, the traitorous MWSS Board and President Arroyo’s duplicitous economic handlers think that we will take the price increases and the amendments as done deals, they are wrong. AKBAYAN will press for a full Congressional investigation of the anomalous processes that led to these. We have likewise filed a complaint against retired Chief Regulator Rex Tantiongco and other members of the MWSS Board for colluding with concessionaires, corrupting the regulatory process, thereby prejudicing consumer interest. We urge Maynilad and Manila Water consumers to resist the abuses of these greedy firms and assert our right to decent and affordable water services.
MARIE VICTA LABAJO
Secretary General
AKBAYAN Citizens’ Action Party
More from BANTAY-TUBIG Website.
to this blog.
No comments:
Post a Comment