Manila Water seeks P79B compensation from gov’t

Rappler.com

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Manila Water seeks P79B compensation from gov’t
The utility firm says it needs to be paid for projected losses from 2015 to 2017 due to the arbitration ruling that bars it from recovering its corporate income tax


MANILA, Philippines – Ayala-led Manila Water Company Incorporated is seeking a  P79-billion ($1.79 billion) compensation from the government for projected losses due to an arbitration ruling that bars it from recovering its corporate income tax.

In a statement  on Thursday, April 24, Manila Water said the decision of the International Chamber of Commerce (ICC) declaring the firm a public utility would adversely affect its rate of return, thus projecting P79 billion ($1.79 billion) in losses from 2015 to 2037.

In September 2013, water regulator Metropolitan Waterworks and Sewarage System (MWSS) ordered the company to cut its rates by P1.45 ($0.03) per cubic meter. But the water firm, including Maynilad, said it will pursue legal options to assert the provisions in its contracts regarding rate-rebasing.

Manila Water disputed the rate reduction before the ICC but the appeals panel slashed Manila Water’s basic water charge by 11.05%, equivalent to a decrease of P2.77 ($0.062) per cubic meter. The basic water charge reduction would be staggered for 3 years.

Manila Water pointed out that during the privatization of water supply initiated by the MWSS in 1997, the national government maintained that the MWSS would remain as the public utility and that under the concession agreement (CA), Manila Water would be an agent and contractor of MWSS.

“The position of MWSS, as upheld by the appeals panel, diverges from the original intent of the CA and the representations of National Government in 1997. We now claim against this primary obligation of the national government to account for the impairment caused by this change,” said Manila Water president Gerardo Ablaza Jr.

The company already submitted a Notice of Claim to the Department of Finance (DOF) for the sovereign compensation it is seeking.

Ablaza said Manila Water would implement the new rates even as it pursues its claim with the national government.

Manila Water provides water and wastewater services in the east zone of Metro Manila covering Makati, Mandaluyong, Pasig, Pateros, San Juan, Taguig, Marikina, and parts of Manila and Quezon City, as well as Rizal province. It also has projects through subsidiaries in Laguna, Pampanga, Boracay, and Cebu. – Rappler.com

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