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Yet another Pandora’s

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By TONYO CRUZ

Tonyo Cruz

Tonyo Cruz

We have been told or led to believe that privatization is the antidote to the inefficiency, mismanagement and corruption besetting vital and essential public services.

But privatization has almost always turn out to be a Pandora’s box, “a present which seems valuable but which in reality is a curse.”

Perhaps there’s no better example of this right now than the artificial water shortage in the east concession zone supposedly serviced by Manila Water Corporation.

According to the the MWSS annual report for 2017:

“MWSS was privatized through public bidding after government realized that the private sector is better equipped and suited to continue its operations given the conditions prevailing during that time. Manila Water Corporation and Maynilad Water Services, separately won the bid for their respective service areas for an initial 25-year concession period which was later extended to another 15 years.”

But Maynilad would suspend paying concession fees in 2001, and its owners leave the business altogether, citing “financial difficulties.”

As a result, the same annual report says that “MWSS used its own funds to meet the maturing obligations of Maynilad. Thereafter, from July 2001 to 2006, MWSS had to obtain a number of loans from various banks and financial institutions to meet its maturing obligations and expenses which the (unpaid) concession fees from Maynilad were supposed to cover.”

The Lopez Group has since left Maynilad, and turned over the company to the Metro Pacific Group and DMCI.

Both Maynilad and Manila Water have been happy about the retail water business.

For instance, Manila Water “recorded a 7% increase in 2017 core net income to P6.5 billion, driven largely by the strong sales of its Metro Manila water concession, the expansion of other local operations and higher supervision fees,” says a Business World report.

In a filing at the Philippine Stock Exchange, Manila Water claimed it is serving about 6.5 million people in its concession area in the eastern side of Metro Manila.

The Ayala-owned Manila Water now has subsidiaries in in Boracay, Cebu, Clark and Laguna, and at least two foreign affiliates.

This ebullient 2018 disclosure before the PSE gives a stark contrast to its notice, also to the PSE, regarding its continuing failure to deliver water to its millions of customers, big and small. The multibillionaire Ayala family meanwhile has been silent, some say shielded, from the controversy.

What has happened to the mantra that companies like Manila Water were supposedly “better equipped and suited”? Is it only referring to the pesos and centavos, or dollars and cents, at the end of the year, when big businesses take stock of the amount of money in profits?

More than two decades after privatization, half of Metro Manila doesn’t have water. For days or weeks now, and there’s no end in sight, from the same company portrayed by itself and by government was “better equipped and suited” for delivering this service. Except perhaps during World War II, MWSS didn’t have such a bad service record.

***

In the first 20 years of privatization, the MWSS granted generous rate hikes to Manila Water and Maynilad.

Independent think-tank Ibon Foundation said Maynilad had been allowed to repeatedly raise its water rates from P7.21 in 1997 to P46.75 in 2017, or a whooping 548 percent.

Manila Water has been allowed to repeatedly increase water rates from P4.02 in 1997 to P34.65 in 2017. That’s 762 percent.

***

“In celebration of its 140th anniversary, MWSS was gifted with a new modern gymnasium and cafeteria by Manila Water and Maynilad,” says a 2018 press release by the same agency that regulates Manila Water and Maynilad.

Aren’t the MWSS, Manila Water and Maynilad aware of Republic Act 6713, also known as the Code of Conduct and Ethical Standards for Public Officials and Employees?

Doesn’t the law state quite clearly that: “Public officials and employees shall not solicit or accept, directly or indirectly, any gift, gratuity, favor, entertainment, loan or anything of monetary value from any person in the course of their official duties or in connection with any operation being regulated by, or any transaction which may be affected by the functions of their office.”

***

Did you know that the government no longer controls the highly important Angat Dam, which serves 98 percent of Metro Manila’s water needs?

It had been privatized, and is now owned by Korea Water Resources Development Corp. and the San Miguel group.

***

Elsewhere, another set of “better equipped and suited” big businessmen have their eyes set on the New Centennial Water Source-Kaliwa Dam Project, or Kaliwa Dam.

According to its annual report, “the MWSS Board, in a meeting held last 13 December, 2017, has approved the following: a) The Limited Competitive Bidding for three (3) Chinese Contractors endorsed by the China Ministry of Commerce through the Department of Finance (DOF) following the applicable procedures under Republic Act 9184, and the bilateral arrangement between the Governments of the Philippines and China; and b) The results of the vetting done on the three (3) Chinese Contractors.”

This was almost a year ahead of Chinese President Xi Jinping’s much-touted visit to the Philippines, on the invitation of President Rodrigo Roa Duterte.

The press widely reported Chinese president’s commitment to provide Official Development Assistance — or loans — for Kaliwa Dam. And by loans, we mean the same Chinese loans that are more expensive if obtained from or granted by other countries.

The MWSS and the DOF should disclose and publish all the documents, agreements and arrangements regarding the Chinese government’s involvement in the Kaliwa Dam. We should ask the Senate and the House to investigate. We cannot let any foreign government to control our water resources.

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