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From the Chairman

Charlie A.V. Gorayeb

Charlie A.V. Gorayeb

Chairman of the Board, CREBA Chairman, CREBA Advocacy & Legislative Affairs Committee Honorary Consul General, Republic of Djibouti

On High Water Rates

The Chamber of Real Estate and Builders’ Associations, Inc. or CREBA is rallying behind a consumer advocacy group called the Water for All Refund Movement or WARM to compel government to take swift action in addressing the lingering problem of high water rates that has continued to hound millions of water consumers in the country. Specifically CREBA and WARM are calling upon government regulators to act on the unabated rise in water cost.

CREBA, the largest real estate and housing development group in the country, also batted for strong support to various advocacy groups and individuals, who, in their bid to put an end to unconscionable hikes in water prices, have raised issues in the regulatory governance of the water sector. This is because real estate industry stakeholders strongly believe that the problem on water services could threaten the growth of the housing industry particularly in areas that suffer from ineffective water service delivery.

The Maynilad Water Services Inc. (MWSI) and Manila Water Corporation (MWC), principal water distributors in Metro Manila and neighboring localities in Bulacan, Laguna, Rizal and Cavite, have recently petitioned the Metropolitan Waterworks and Sewerage System (MWSS) for water rates increases of P10.30 and P5.83 per cubic meters, respectively.

Based on reports we have gathered, CREBA agrees that the spiraling cost of water has made it imperative for the MWSS to “meticulously examine the annual determination of the Return on Rate Base of 12 percent as prescribed by the Public Service Law” of any adjustments in water cost. 

Reports assert that since July 30, 2004 after the Commission on Audit submitted the audit of asset used in operation, Manila Water was discovered to have had an actual rate of return of 40.92 percent over and above the 12 percent cap imposed by the Public Service Law. This exposed the fact that there has been no annual audit of assets used in operation and no asset registry in MWSS.

We deem it high time for the MWSS regulators to look for possible irregularities committed in past rate rebasing proceedings as a basis for reforming this system of determining water rates, which was part of the exposes made by Bagong Henerasyon Party-list representative Bernadette Herrera-Dy who called for a congressional inquiry on the issue.

In her report, Herrera-Dy asked MWSS to disclose the annual audits, status, collection and other data on multi-million peso water improvement projects supposedly being funded by collections of MWSI and MWC from its customers. Among these projects are the Laiban Dam, Wawa Dam, Earthquake Contingency Fund, 15 cubic meter per second Angat Dam Water Irrigation Replacement and several other projects.

The housing sector likewise calls for the implementation of international standards for sewerage and sanitation to justify the high cost of service imposed by MWSI and MWC.

Customers are being billed based on international criteria being applied in Japan, Singapore and Taiwan but sewerage and sanitation services extended by the two water concessionaires are way below the standards set in the said countries.

Metro Manila cities will not achieve international competitiveness in terms of living standards, health and balanced environment as long as effective sewerage and sanitation systems are absent. We urge MWSS to be open to the public in their regulatory governance. 

Our organization also volunteers to be “a public participant” in the current rate rebasing exercise of the MWSS as we advocate for transparency in water service delivery.

Published in the Manila Bulletin February 2013

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