The Metropolitan Waterworks and Sewerage System (MWSS) is optimistic the signing of the national government and Manila Water Company Inc. of a revised concession agreement (CA) will result to more similar partnerships in the future.
“The contract is both advantageous to the government, a big win for the Filipino people and the consuming public and that it is commercially and economically viable to the investors and concessionaire,” said Reynaldo Velasco, MWSS chairman and concurrent OIC administrator.
In a statement, Velasco said the revised document that will be in effect until July 31, 2037 was modelled after the New Clark City joint venture agreement of the Bases Conversion and Development Authority with a private sector, currently with the lowest water rate.
Among the key features of the revised CA are improved policies to protect consumers such as the removal of the recovery of corporate income taxes and adjustments for foreign currency differential.
To mitigate its impact on customers, the inflation factor to be used was adjusted to 2/3 of the consumer price index adjustment. Caps were also imposed on increases in standard rates for water previously at 1.3 and for wastewater formerly at 1.5.
Instead of a market-driven appropriate discount rate, Manila Water is now limited to a 12-percent fixed nominal discount rate apart from a tariff freeze until Dec. 31, 2022 to assist the disadvantaged sector and to contribute to the recovery of the economy post-pandemic.
In a separate statement, Maynilad Water Services Inc. said it is hopeful its own revised CA with the national government will be completed soon.
“We look forward to starting our own talks so that the process can be concluded at the soonest possible time. With a new CA in place, we can proceed with the various projects needed to sustain service improvements for the long term,” said Ramoncito Fernandez, Maynilad president and chief executive officer. – Jed Macapagal