Recto: Maynilad, Manila Water should defend 15-year extension
of concessionaire

Sen. Ralph G. Recto yesterday said the two water utility companies operating in Metro Manila should defend the 15-year extension of their concession agreements with the government in light of the water supply shortage that hit several areas in the metropolis which affected a significant number of residents last month.

In an interview over DZRH, Recto said Maynilad Water Services, Inc. and Manila Water Company would have to bare its plans for the duration of its contract with the government after the Metropolitan Waterworks and Sewerage System (MWSS) approved a 15-year extension of the concession agreement with the two firms late last year.

"The basic question here is, what's in it for the government and for the consumers? Would the extension of their concessions benefit the people and the government," Recto said.

The senator filed a resolution last month seeking a Senate probe into the water supply shortage that affected Metro Manila residents early in July.

Recto said the Maynilad and Manila Water, as well as MWSS, can defend the extension during the inquiry.

The enactment of National Water Crisis Act in 1995 paved the way for the privatization of water utilities and in 1997, Maynilad and Manila Water were granted each by the government a 25-year exclusive concession to operate, maintain and invest in the water and sewerage system covering their respective areas in Metro Manila.

The agreements would have ended in 2022 but because of the extension, they now end in 2037.

Recto said the circumstances surrounding the extension have not been fully disclosed to the public and the Senate probe into the water shortage last month would provide the appropriate venue for such purposes.

He said that Maynilad and Manila Water should disclose how much they intend to invest in terms of capital outlay and other programs in order to improve the delivery of services to their consumers.

"Would they ensure a stable, steady and sustainable supply of water in Metro Manila? Would they pour in more money and create more jobs in the process? Would they commit that, for a certain period, water rates will not be increased?" Recto said.

The senator added that both water utility companies have non-revenue water (NRW) or a percentage of their water supply that are lost either through system leaks or pilferage.

"Maynilad has an NRW of 57 percent while Manila Water has about 14 percent. They should disclose how they intend to address this now that they have been extended for another 15 years," Recto said.

He also added that Metro Manila has, at present, a population of over 11.5 million as of 2007.

"By 2037, this number could double or even triple based on an average annual growth rate of 2.11 percent. These two water utility firms should be able to show that they will be able to provide efficient service to the residents of Metro Manila at affordable costs," Recto said.

"There are so many questions surrounding the extension of the concessions of these two firms that should be answered in the Senate inquiry. But one thing is for sure, we here in the Senate would be looking after the interest of the consumers and the government."

Maynilad is the water utility concessionaire for the 17 cities and municipalities that comprise the West Zone of the greater Metro Manila area, while Manila Water provides water and wastewater services to the 23 cities and municipalities of eastern Metro Manila and Rizal Province.