Casiño says water firms should not let public shoulder their forex losses

PARTYLIST Rep. Teddy Casiño today lambasted the proposed water rate hike of Manila Water Corporation, saying they were passing on to the public costs that should be shouldered by the big corporate concessionaires.

“Wala talagang pakundangan ang Manila Water, simula pa lang ng taon dagdag singil na kagad ang ipinambubungad sa atin. Ni hindi nga katanggap-tanggap ang dahilan nila ng increase,” Casiño said.

Manila Water recently announced the implementation of the foreign currency differential adjustment (FCDA) that will slightly raise water rates by P0.08 per cubic meter in its area.

Regular 10 cu m residential consumers will see a one percent increase in their monthly water bill to P139.11 from the current charge of P137.82 while those consuming 20 cu m will be charged P306.72 monthly from the current charge of P303.90. Those consuming 30 cu m monthly will be charged P624.67 in 2013 from the current P618.94. Those consuming 50 cu m, on the other hand, will be charged P1,361.26 monthly in 2013 from the present P1,348.74.

“Even if they say that the tariff adjustment has no impact on the projected net income of the company.  This new round of water rates adjustment is both unjustified and unconscionable. It is outrageous for consumers to be made to pay for the risks and wrong business decisions of the water concessionaires with regards to the loans they make,” the Makabayan bet said, pointing out that businesses regularly
cover their incurred losses.

“Ang nangyayari kasi e kada may gagalaw na foreign currency e sa atin binabawi ng water companies. Parating tayong mga consumers ang lugi samantalang sila e sigurado ang kikitain. Hindi porket monopolyo nila ang serbisyo sa isang lugar ay pwede na nilang gawin ang kahit anong gusto nila,” he added.

The increase according to Manila Water is because of the depreciation of the peso versus the Japanese yen (P0.5253 to P0.5302) during the third quarter. During this period, more than half of the company’s loan payments were made in yen, which appreciated against the peso.

“In other businesses, losses due to changes in foreign exchange rates are absorbed by the company as part of regular business risks. But in this case, the concessionaires borrow from foreign creditors without any qualms knowing that they are insulated from the risk ordinary borrowers take because they’re allowed to pass on their forex losses to their consumers. It is like having their cake and eating it, too,” said Casiño.

He said such schemes have allowed Manila Water and Maynilad to increased water rates by 600% since 1997 when the MWSS was privatized.

“To make matters worse, the Metropolitan Waterworks and Sewerage System-Regulatory Office (MWSS-RO) approved the rate hike even as the two private water concessionaires have yet to refund to their respective customers the more than P6 billion they have collected for unimplemented water and sewerage improvement projects, along with the dam projects” said the progressive solon.

“The impending water cost adjustment has been approved although consumers have never been given direct access to information into the formula used as basis for the MWSS-RO to approve the hike. They have not given the public the opportunity to challenge the increase. Public information and consultation are imperative requisites that the MWSS-RO, which supposedly serves as the protector of public interest, has totally been denied to the populace,” he added.

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