MWSS and new Maynilad owner will not bring water to waterless communities : QC IMC

BANTAY TUBIG NETWORK
November 23, 2006

MWSS and new Maynilad owner will not bring water to waterless communities

Two years ago, the National Anti- Poverty Commission (NAPC) identified 212 communities or three million residents[1] of Metro Manila as "waterless". What NAPC meant was that these communities have no means, or lacked the access to clean, affordable water. Eighty percent of these belong to the West Zone, Maynilad's assigned area of responsibility.

The search for a new Maynilad owner has been on for months and now, nears conclusion. But the concern for waterless communities is yet to be taken up. Not a whisper coming from the Board of Trustees of the Metropolitan Water and Sewerage System (MWSS), and much less from the bidders.

" Many of these communities are in the most depressed areas of Metro Manila, they stand no chance of getting the service anytime soon", according to Jude Esguerra, spokesperson of water utilities watchdog Bantay Tubig. "We know that funds brought in by investors will first pay for $30 million that MWSS used to save the former owners of Maynilad from bankruptcy. We also know that as cash comes in from customer payments the heavy debt burden of Maynilad gets first priority. Other things considered less important by MWSS come into consideration later."

Esguerra adds, "if there is some money left after paying Maynilad's creditors and when considering service expansion and water supply allocation, our information is that commercially lucrative areas and easy-to-discipline customers will be given preference. Tsaka na lang yang mga urban poor areas."

MWSS is expected to transfer its shares in Maynilad to a new owner in the coming weeks. Missing in the entire selection process is MWSS' insistence that bidders should address the plight of waterless communities. MWSS only need to make the threat that their performance bonds will be taken from them.

There are two weak links in this second privatization process Esguerra notes, "first, there are no targets and deadlines regarding the waterless communities. And second, the MWSS has already allowed the required performance bond to be brought down from $120 to $30 million, insuring against scenarios wherein Maynilad will fail to honor its financial obligations but not from failures to achieve service improvement targets for the poor."

Esguerra makes the charge that MWSS is not performing its mandate -- "MWSS is refusing to hold Maynilad owners accountable for the service that the company needs to deliver to the waterless communities of Metro Manila."

The MWSS Board previously has agreed twice to the postponement of the expansion plans. The first permission to postpone expansion plans was given during the review of tariffs and targets in 2002 (rate re-basing), the second permission to postponement was given in-line with the effort to save Maynilad from bankruptcy.

Bantay Tubig's Esguerra believes that "in the end the Maynilad creditors will be paid, MWSS will recover money it used for the bailout, the company is rehabilitated – but services for the waterless communities will not be delivered."

"If we take a long view," Esguerra says notes, "next year is the tenth anniversary of the privatization of water services in Metro Manila. The original promise is that on the tenth year, there will no longer be waterless communities in Metro Manila. (Well) the price of water has been raised from P5 per cubic meter to P30 per cubic meter today, and yet the waterless communities of CAMANAVA and Quezon City are still not part of the MWSS plan."

Because there are no commitments to bring water to the poor areas, especially in places like CAMANAVA and Quezon City, the Bantay Tubig Network wants the reprivatization of Maynilad to be stopped.

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Contact Person: Jude Esguerra, Bantay Tubig/ Ernesto E. Tomas Jr. @Nos. 9218049 / 4346674

The Bantay Tubig Network is a non-profit, development- oriented citizens' coalition organized in April 2002 in response to the worsening water and sanitation supply situation in the country. Bantay Tubig is for adequate, accessible and affordable water, and among its activities are to monitor regulatory processes, price increases, quality standards, and the performance of water companies in Metro Manila and the rest of the Philippines.

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[1] Comment: NAPC defined "waterless" as those communities wherein less than 50 percent of the population was without water. The information also came from the two concessionaires themselves. Please contact Bantay ubig for data, including NAPC estimates, maps.