With concession agreement, no hope Maynilad, Manila Water will voluntarily lower profits

For various consumer groups, it is not a question of amending the agreement but scrapping it altogether.

By MARYA SALAMAT
Bulatlat.com

MANILA – As more people in Metro Manila protest against the private water companies’ drive to hike water rates further starting this year, Manila Water and Maynilad appear to be engaging in a multi-media advertising blitz to justify their actions. Deploying spokespersons and issuing full-page ads, Maynilad and Manila Water have both cited the concession agreement they have with the Philippine government as justification for their charges and proposed hikes.

With mainstream media coverage of their statements and claims outnumbering coverage of protests, Maynilad and Manila Water defended their profits and the passing on of all their operational and non-operational costs to the more than 14 million customers. They cite the concession agreement, which the government itself has reviewed, approved and signed.

In the Senate, former Senate president Juan Ponce Enrile defended Maynilad and Manila Water, saying these water firms should not be blamed for the provisions in the concession agreement.

So, if the water companies cannot be faulted because they are only taking advantage of the concession agreement, why is the Aquino government not doing anything about the said concession agreement? This week, protesters trooped to the headquarters of the water companies and the MWSS, the supposed government regulator, to dramatize what the government should do: tear up the said concession agreement.

More protest actions against the water companies’ proposed hike continue to be held. Today, July 12, urban poor communities in Tondo, Manila are staging what they call as “Pila Balde” (water pail queue) protest to dramatize their protest against the looming water rate hike, amid unimproved water services.

Private companies’ “veiled threats”

President Benigno “Noynoy” Aquino III has been repeatedly criticized for being “deafeningly silent” on the abuses of the water companies, which charge their customers all their expenses including income taxes, flowers, donations, junkets abroad, currency changes and various unimplemented projects and activities. Yet, in the face of snowballing public protests that portray Maynilad and Manila Water as “greedy” and the MWSS and the government as “in cahoots” with these “greedy” water companies, Maynilad and Manila Water have deployed efforts to protect this concession agreement.

In full-page ads, they issued a “calculated threat” seemingly directed at the Aquino government, warning it that it would be regarded as “inept” if it changed the rules of the game now, said Sonny Africa, research director of economic thinktank Ibon Foundation.

Considering that Aquino’s economic thrusts depend on public-private partnerships (PPP) like the one embodied in the water concession agreement, the full-page ad warned about the implications of revising the concession agreement on all Public-Private Partnership projects the Aquino government is intending to undertake, according to Africa of Ibon.

Protesters, on the other hand, are calling for the “junking of the patently onerous water concession agreement.” For various consumer groups, it is not a question of amending the agreement but scrapping it altogether.

Bayan chairperson Carol Araullo said if the problem that resulted to water privatization was inefficiency, then the solution should have been making the body that oversees it efficient and not corrupt. As a basic need and a human right, water, she said during one protest action in front of the MWSS, should have remained a public enterprise, one operated more for public service and not as a profitable business that only those who have money could afford.

“If the problem is the government cannot ensure that, then the government should be changed, and not the ownership and reason for operation of water services,” Araullo said.

This week though, there may be moves to allay protests by dangling the possibility of compromises, but still within the framework of the same concession agreement. One way of doing this, warned Africa of Ibon, is through arbitration.

Africa warned that there are problems in arbitration: all processes or venues in which water rates and charges can be reviewed and revised are skewed in favor of these water companies.

If all the protests today will only be watered down by arbitration, all the public can pray for is for water companies to have a heart and voluntarily skim off a portion of their profits to provide consumers some relief.

In an interview with Bulatlat.com, Africa explained that the arbitration process is thoroughly “within the framework of the water concession agreement, which is defective and biased for Maynilad and Manila Water.”

He added that in the arbitration, assuming it pushes through to water down protests, a panel would be created to review the water rates. It would have three members: one is to be chosen by the MWSS, one to be chosen by the water companies, and one to be chosen by the International Chamber of Commerce. The latter is known as an organization of big business leaders. As such, Africa warned that two of three are immediately expected to be biased for big business. The would-be chair of such panel is the person appointed by the International Chamber of Commerce.

Considering that it goes against the grain to hope that such a panel would ever decide against the interest of big business for profits – especially when this interest is already assured in the concession agreement – the move itself of entering arbitration and forming this panel already constitutes a waiver. According to Africa, the government’s and water companies’ going to arbitration means they, particularly the government, are waiving the right to question the decision of that panel.

Fifteen years after water services in Metro Manila became a profitable business for Maynilad and Manila Water, various groups and consumers are now saying it is no longer a question of amending the concession agreement. After water rates increased more than seven times, and the water companies’ record of up to 44-percent yearly profit increases, groups are now demanding from Aquino to declare the concession agreement as onerous, scrap it altogether and deal with the consequences. ()

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