Manila Water fined P1.1B

THE METROPOLITAN Waterworks and Sewerage System (MWSS) has penalized Ayala-led Manila Water Co. Inc. more than P1 billion for the water shortage its consumers experienced in March, the first time the agency fined one of its two concessionaires.

The amount is broken down into a P534.050-million fine and P600 million for development of a new water supply source for the affected areas, the MWSS said in a statement on Wednesday.

The publicly listed Manila Water said it would comply with the decision, but blamed the MWSS for not ensuring adequate water supply.

The resolution was signed by MWSS Board Chairman Franklin Demonteverde, Vice Chairman and MWSS Administrator Reynaldo Velasco, and members Melchior Acosta

Jr., Mariano Alegarbes, Merly Cruz, Jose Hernandez, Valeriano Pasquil, Melanie Sia Lambino and Elpidio Vega.

The MWSS said its board unanimously approved the recommendation of the MWSS Regulatory Office on the imposition of penalties on Manila Water for its failure to comply with its concession agreement.

Article 10.1 of the concession agreement states that “a failure by the concessionaire to meet any service obligation which continues for more than 60 days (or 15 days in cases where the failure could adversely affect public health or welfare) after written notice thereof from the Regulatory Office (RO) to the concessionaire shall constitute a basis for the RO to assess financial penalties against the concessionaire.”

The P1.13 billion will be on top of the P500-million rebates to be paid out by the Ayala-led company.

The water shortage affected a total of 1.2 million households in Manila Water’s East Zone concession, covering parts of Metro Manila and Rizal. The West Zone concession is handled by Maynilad Water Services Inc., a joint venture between Metro Pacific Investments Corp. and construction giant DMCI.

Velasco said the MWSS was putting together a “realistic and doable” water security roadmap to ensure enough water supply.

“The water shortage was an eye-opener, and sad to say, the new MWSS Board inherited this lingering problem having assumed office only in February 2017,” said Velasco.


MWSS to blame – Manila Water

In a separate statement, Manila Water said it would abide by the decision of the MWSS.

“We will abide by the MWSS decision to impose a penalty. While we are not the root cause for the inadequacy of the raw water supply coming from Angat Dam, which we

are mandated to treat and distribute, Manila Water, as agent and contractor of water services of MWSS, hold ourselves accountable for our inability to provide our consumers with the usual uninterrupted water service,” said Manila Water President Ferdinand de la Cruz.

“Our inability to provide our usual 24/7 water supply to some of our consumers is because Manila Water’s allocated water supply from Angat Dam is no longer sufficient for the total demand of the East Zone consumers,” he added.

The Manila Water chief said the utility’s raw water allocation remained unchanged at 1.6 million liters per day since the concession deal started in 1997. Back then, the East Zone had a population of only 3 million people.

“Today, Manila Water serves a population of almost 7 million people, whose per capita consumption has significantly increased through over two decades of economic progress in Metro Manila. We cannot source any more from our system losses which have already been brought down to 12 percent from a high of 63 percent when we inherited the East Zone concession of Metro Manila in 1997,” de la Cruz said.

He explained that while the company had sought the development of new water supply sources, this was the responsibility of MWSS based on the concession agreement.

De la Cruz said Manila Water was focusing its efforts to address water supply issues of those residing in the elevated and farthest areas of its concession.

“As of April 23, we have made water available for at least 8 hours, at least at the ground floor level, to 99 percent of our customer base. We have narrowed the gap of our supply deficit which has been reduced to 57 million liters per day from a high of 150 million liters per day through various supply augmentation efforts,” he said.

“We reaffirm our commitment to work closely with MWSS to address the remaining water supply deficit. We continue to seek understanding from our consumers as we fine-tune our operations to spread the still limited water supply across our customer base,” de la Cruz added.

Shares in Manila Water went down by 3.40 percent or 0.80 centavos to close at P22.70 apiece on Wednesday. (TMT)