Maynilad Water Services, Inc. (Maynilad) has been allowed to increase the tariff it charges customers but only as this relates to inflation and not the entire price adjustment mechanism, regulators said on Friday.
This was learned from Patrick Lester N. Ty, chief regulator at the Metropolitan Waterworks and Sewerage System (MWSS) who also raised the likelihood of more sanctions against the concessionaire operating the western portion of Metro Manila.
“With regards to Maynilad, we also know they need the funds to develop new water sources and to fix their system as well. However, we did not approve everything and we only approved the inflation (component) for this year because of their problems,” Ty said.
This relates to Maynilad’s bid to finance its P150 billion expansion program through a series of tariff rate adjustments starting with a P3.29 per cubic meter (PCM) rate this year, P6.26 PCM next year, P2.12 PCM for 2025, 84 centavos PCM for 2026 and another 80 centavos PCM by 2027.
Inflation, or the rate of change in prices, pushed still higher in December last year to 8.1 percent from only 8 percent the previous November, the highest since November 2008, with the housing and utilities component steadily rising to 116.1 points in December from only 108.7 points just a year earlier.
Food price accounted for the bulk of the increases but the various utilities and housing indices were major contributors as well, based on data from the Philippine Statistics Authority (PSA).
According to Ty, Maynilad has to fix its various operational problems first before the regulators extend to it the full measure of tariff rate adjustments enjoyed at present by co-concessionaire Manila Water.
He raised the likelihood of particular sanctions against the utilities firm “because of lots of service interruptions” in the south of the concession area operated by Maynilad.
Ty noted that water service interruptions were reported in the south portion of the concession area affecting the cities of Paranaque, Las Pinas, Muntinlupa, Bacoor, Imus and Kawit over the long Christmas holidays so that “lots of people went without water during Christmas and the New Year.”
“We cannot give them everything or they won’t have the incentive to fast track, to move things faster. That is why we only approved the tariff adjustment for inflation and that the next tranche of adjustments, which is higher for Maynilad, will be conditional,” he emphasized.
Ty gave assurance that on the whole, potable water service across the concession areas should remain sufficient even as the various expansion projects are pursued.
Rival Manila Water which operates the east portion of the concession earlier successfully petitioned for its own tariff rate adjustment to finance a P180 billion expansion program over the next five years.
Manila Water’s concession extends over 23 cities and municipalities while that of Maynilad covers 17.
