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Maynilad's offer of a debt to equity swap deal is not in favor of the consumers
by Bagong Alyansang Makabayan
Tuesday, Mar. 16, 2004 at 6:05 PM
Bayan calls for refund of excess charges
The Bagong Alyansang Makabayan today criticized Maynilad's proposed
debt to equity swap saying that the scheme does not solve the
problem of high water rates which the group said Maynilad has yet to
address.
"Maynilad has overcharged consumers by at least P6.4 billion through
charges such as the Foreign Currency Differential Adjustment (FCDA)
and the Accelerated Extraordinary Price Adjustment (AEPA) which now
comprise almost half of our water bills. These were supposed to go
to payments for Maynilad's concession fees yet not one centavo was
paid by Maynilad to the MWSS," said Bayan spokesperson Renato M.
Reyes, Jr.
Bayan said that it was already unreasonable for Maynilad to let
consumers shoulder the unpaid concession fees and that it was
already abusive for Maynilad to divert these funds elsewhere.
"Maynilad earns around P7.4 million a day from these overcharges. It
is patently unfair for many consumers who are forced to shoulder
these PPA-counterpart for water rates. It would be more unfair if
the government will let Maynilad get off the hook that easy through
a debt to equity swap deal," Reyes added.
Bayan proposed the following measures to resolve the Maynilad issue:
1) an immediate stop to the collection of the FCDA, AEPA and
all other overcharges which go to Maynilad's debt payments
2) the full refund of these amounts to consumers
3) Maynilad should shoulder the cost of their P8 billion unpaid
concession fees
4) Government should draw from Maynilad's performance bond
5) Government should reverse the privatization of Maynilad
"The Maynilad debacle has already shown the failure of the
privatization policy. There is no sense in continuing with a failed
program that threatens to burden consumers with even higher rates in
the future. It has become abundantly clear from the actions of the
government and Maynilad that it is the public who will shoulder
Maynilad's P17.59 billion total liablities," Reyes said.
Bayan argued that Maynilad's continued "financial viability" will
really depend on how much more the water utitlity can charge from
its consumers.
"Any talk of a debt to equity swap that disregards the interests of
the consumers is simply a convenient way of saving Maynilad at the
expense of the public," Reyes added.
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