Maynilad Water Services Inc. customers stand to generate substantial savings on their water bills should the Metropolitan Waterworks and Sewerage System (MWSS) extend its revised concession agreement (RCA) by another 25 years to 2047.
Randolph Estrallado, Maynilad chief operating officer, also said in a public hearing Monday the government has to spend at least P571 billion should it set aside and deny the company’s application for extension of the RCA.
At the rate rebasing exercise concluded last year, Maynilad and the MWSS already factored the extension of the concession in determining the tariff required to recover cost, resulting in a lower tariff adjustment of 35.61 percent, computed one-time, compared to 58.56 percent were the extension denied.
Maynilad said this means an average residential customer using 30 cubic meters of water a month saves as much as P212 a month from the extended concession since the RCA term extension was already imputed at the recent rate rebasing exercise.
Maynilad said extending the agreement will strengthen the company’s operational and financial capabilities, enabling the business to provide consumers with affordable water service without undue uncertainty or delay.
Also, an extended RCA will allow Maynilad to have a longer cost recovery period resulting in lower tariff increases.
“The extension represents a mutually beneficial arrangement for Maynilad and our valued customers. Beyond our commitment to ensuring a sustainable water future, it underscores our dedication to making our services more affordable to our consumers. By reducing the necessary tariff increase, we’re making water services more affordable, making life better for the communities we serve,” said Ramoncito Fernandez, Maynilad president, in a statement.
Maynilad operates under an RCA that lapses on 6 May 2037 that Republic Act 11600 made effective by another 25 years beginning 10 December 2021.
“Aligning the RCA with our legislative franchise is a strategic and crucial step towards a sustainable water future. This foresight allows us to engage in long-term planning and substantial investment in our water infrastructure. With a clear vision towards 2047, we are in a stronger position to allocate our resources efficiently, particularly for significant projects and necessary improvements,” Fernandez added.
Maynilad has outlined an P85 billion investment program during the extension period that significantly expands its water services and bring clean water to an additional 200,000 individuals and serve an estimated population of 11.6 million people in 2037 to 11.8 million by 2047.
A substantial portion of its capital will also be dedicated to replacing 250 kilometers of aging pipelines to further control non-revenue water and cut its water loss to 20 percent by 2030 all the way through 2047.
Estrallado said should government decide against extending the RCA beyond 2037, the State will then be compelled to spend more than P500 billion.
“If the RCA lapses in 2037, the government will need to shell out P332 billion to achieve (improvement) targets. More than that, the government also needs to pay expiration payment of P239 billion,” Estrallado said.
Maynilad claimed capital expenditure meant to boost current services will not have been fully recovered by 2037.
Maynilad serves the cities of Manila, Quezon City, Makati, Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas and Malabon as well as the cities of Cavite, Bacoor and Imus, and the towns of Kawit, Noveleta and Rosario in Cavite Province.
