THE Commission on Audit has raised concerns that customers of Manila Water Company Inc. (MWCI or Manila Water) and Maynilad Water Services Inc. (MWSI) could end up shouldering the counterpart funding for the Kaliwa Dam project.
In the 2022 audit of the Metropolitan Waterworks and Sewerage System (MWSS) released last week, the COA said the two concessionaires have been overbilled by the government regulator in the last four years in excess of their obligation under the 1997 Concession Agreement and the 2021 Revised Concession Agreement.
The MWSS management countered that based on the three-way amended Memorandum of Agreement dated October 4, 2018 entered into with the MWCI and the MWSI, the two concessionaires are “obligated to pay all the necessary local counterpart funds” for the New Centennial Water Source — Kaliwa Dam Project (NCWS-KDP).
However, the COA said the MWSS exceeded the limitations of the agreements, hence the collections are considered “an irregular expenditure of the Concession Agreement” and warned that it could result to additional tariffs to water consumers.
On top of this, the MWSS also collected from water concessionaires the salaries and wages of Bantay Gubat and expenses relative to the Ipo Watershed Development Program.
It pointed out that the 1997 and 2021 agreements specifically stated that the obligation imposed on each concessionaire only covered the scheduled payments for the principal, fees, interest and other amounts due under their loan agreements with the MWSS and an amount equal to one-half of the annual budget of the MWSS-Central Office for that year.
“Thus, the collections of the annual budget from the concessionaires should be inclusive of all the funds necessary for the operations of the agency. The NCWS-KDP additional local counterpart fund and the Bantay Gubat fund received from the concessionaires is in excess of the limitations set under the concession agreements,” the COA stressed.
In the review of the MWSS collections over the last four years, it was shown that Manila Water and Maynilad were made to pay P25 million each in 2019 for the “acquisition of lots affected in the construction” of the Kaliwa Dam project in addition to P9.5 million each for the salaries of Bantay Gubat.
In 2020, the water firms were charged P3.1 million each for “preconstruction activity” for the Kaliwa Dam project, P10 million each for the “free prior and informed consent” process, and P8 million for the Bantay Gubat pay.
In 2021, Manila Water paid P35.42 million and Maynila P16.414 million still for “preconstruction activities” for Kaliwa Dam. Bantay Gubat wages cost both P11.4 million while Maynilad also shelled out P25.09 million for “lot acquisition of outlet portal” for the dam.
As of last year, the water firms coughed up P155.37 million each for “standby cost/civil works” for the dam, P80 million each for one-time disturbance compensation for indigenous peoples, and P3.5 million for Bantay Gubat pay. Manila Water also paid P155.3 million for “development fee, annual fee, and bond for the Special Use Agreement in Protected Areas (SAPA).”
“MWSS should be prudent at all ties in its determination of billings to the concessionaires for its actual share of costs and expenses. All the fees and charges received from concessionaires will be recovered through collection of tariffs from consumers,” the COA warned.
