"So much noise is out there about the issue but a review of historical facts on the performance of the two concessionaires is in order."
"So much noise is out there about the issue but a review of historical facts on the performance of the two concessionaires is in order."Every time we open our faucets, it is always to satisfy an immediate need to either quench our thirst or consume water for our domestic needs. Water is indispensable in all agriculture and industrial processes and of course, to all humans. Consequently, the prospect of a serious disruption of Metro Manila’s water supply is a horrific thought that brings back bad memories of the 1990s, when the Metro Manila Waterworks and Sewerage System (MWSS) was in charge. At that time, we had to resort to buying expensive and non-potable water that had to be delivered by those “water trucks” and pumped by hose to fill every water container in the house. It was a messy chore that almost every family in Metro Manila had to perform every few days. There were no mineral water delivery services then, so we had to boil all our drinking water.
In many communities, there were long lines of people lugging as many water containers that their strength can bear to the nearest or not-so-near water source, which was either a deep well or a scheduled truck delivery. And then there was the punishing lifting to a push cart or vehicle to shuttle to your home and back again to line up for another batch of precious water.
These scenes were the daily reality that affected Metro Manila, a crisis situation that prompted the Ramos administration to pass into law the 1995 Clean Water Act which shifted the distribution services of the MWSS to private concessionaires Manila Water and Maynilad.
So much noise is out there about the issue but a review of historical facts on the performance of the two concessionaires, unfairly bashed by the administration’s social media propaganda machinery, is in order for a fair perspective.
The situation then was intermittent water supply with only 70 percent of Metro Manila with water connections. Having intermittent water flow exposed consumers to health risks because every time the rationed water flowed back, the water had a rusty, murky color from the residue pushed out from the old pipes. The water pressure was frustratingly low that only ground-floor faucets flowed. Compounding the problem was so much wasted and lost revenue from tampered meters, illegal connections and pilfering from fire hydrants.
The move to privatize MWSS distribution systems in 1997 was to directly address the poor water services through a Public-Private Partnership model to connect the unserved communities with reliable and clean water. The East zone was awarded to Manila Water, the West zone to Maynilad.
This proved to be a success, practically solving all the distribution problems but requiring billions in capital investments to replace all the old pipes, water meters, plug leaks and overhaul systems for efficient and viable operations. From about 780 thousand connections, there are now more than 2.5 million connections serviced by the concessioners. With distribution problems checked, the concessioners were already warning the MWSS to develop new raw water sources during the Arroyo administration because of the fast-growing population of Metro Manila. The concessionaires could not develop new reservoirs without the approval of the MWSS.
Then a recent Supreme Court decision ordering the concessioners to comply with the Clean Water Act’s provision to build the sewerage infrastructure for 100-percent coverage of their concession areas, effectively reversing an earlier decision that extended the timeline because of practical engineering issues such as closure of the metro’s streets for hundreds of kilometers of excavation and spreading out the allowed tariff increase to ease burden on consumers. There is also the issue of the litany of permits from government agencies and local governments.
Next came the arbitral ruling awarding Manila Water P7.4 billion to recover losses incurred because the government unjustly slashed tariff rates in violation of the concession agreement. Maynilad also got a favorable decision in September 2018 and was awarded P3.4 billion in indemnity. These sparked stinging rhetoric from the President, highlighted by a threat to take over the concessioner’s operations. This sent shock waves in the local and international business community, putting to question the government’s respect for the sanctity of contracts. A big blow to investor confidence that would surely affect our competitiveness and potential funders of the government’s Build, Build, Build program.
Analysts see this regressive and will worsen the water problem because of the lack of capacity of government to operate a complex and capital-intensive operation. It will be destabilizing for the business environment.
In an unexpected but welcome announcement in the recent Congressional hearings investigating the water issue, the two distribution concessioners announced that they will no longer pursue the indemnity awarded by the arbitral courts. A move that demonstrates dynamism and move-forward attitude that looks at the long term and strategic win-win solutions, mindful of the serious repercussions if a water crisis is not averted.
After decades of delays, the current administration is now burdened with a looming water crisis that threatens to disrupt the lives of 12 million inhabitants of the megapolis. As the concessioners have already offered to cooperate and find a middle ground, it is to the best interest of the millions of consumers in the megapolis, not to mention all the industries and economic backlash of a full-blown water shortage. All this anti-oligarch spins may serve political objectives but will do nothing to solve the real problem.
For us consumers, we must seriously save water now. For government, please focus on the water supply and tap the proven capacity and expertise of your PPP partners. They know what they’re doing.