West zone concessionaire Maynilad Water Services Inc. said its customers stand to continue generating substantial savings on their water bills should the Metropolitan Waterworks and Sewerage System (MWSS) agree to extend its revised concession agreement (RCA) to 2047.
Randolph Estrallado, Maynilad chief operating officer, also said in a public hearing yesterday the government may have to shell out at least P571 billion if it decides to not approve the company’s application for term extension of the RCA.
Maynilad said in the rate rebasing concluded last year, the company and MWSS already assumed the extension of the concession in the determination of the tariff required to recover its expenditures and resulted in a lower tariff adjustment of 35.61 percent, computed on a one-time basis, compared to 58.56 percent if the extension was not assumed.
This means that an average Maynilad residential customer who uses 30 cubic meters of water per month currently saves as much as P212 per month from the longer concession, since the RCA term extension was already assumed in the recent rate rebasing, the company added.
Maynilad said extending the agreement strengthens its operational and financial capabilities and enables it to provide consumers with affordable water service without undue uncertainty or delay.
An extended RCA will also allow Maynilad to have a longer period of cost recovery, 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.
At present, Maynilad operates under the RCA with MWSS, an agreement that is set to conclude on May 6, 2037, but Republic Act 11600 made effective on December 10, 2021, covers the company’s franchise that will span a quarter-century, extending through to 2047.
“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.
