Manila Water files Notice of Arbitration to national govt

The Department of Finance's failure to honor the Notice of Claim filed by Manila Water on April 23, 2015 has spurred the private water concessionaire to file a Notice of Arbitration with the Permanent Court of Arbitration in Singapore.

Through this Notice of Claim to the Republic of the Philippines via the Department of Finance, Manila Water called upon the government’s Letter of Undertaking to reimburse its losses in operating revenues arising, it said, from a significant diminution in the rate of return committed in its concession contract. 

These losses are expected to be reimbursed as they are actualized for each remaining year of Manila Water’s Concession, and which are at this point estimated to amount to P79 billion for the entire period of 2015 up to 2037.

In the Letter of Undertaking, the Republic, through the DOF, undertook to indemnify Manila Water, against any loss caused by any action on the part of the MWSS resulting in the reduction of the standard rates “below the level that would otherwise be applicable in accordance with the Concession Agreement.” This effectively denied Manila Water a rate of return “allowed from time to time to operators of long term infrastructure concession agreements in other countries having a credit standing similar to the Philippines” pursuant to Section 9.4 of the Concession Agreement.  

Even if Manila Water continues to pursue its claim, it has started to implement the new rates set by MWSS in June 2015 which incorporates a reduction of P1.66 per cubic meter in the basic charge.

- Interaksyon

Growth in Metro Manila leads increase in Manila Water's nine-month income

Higher billed volumes at its Metro Manila concession pushed up Manila Water Co Inc's earnings in the first nine months of the year.

In a financial report, Manila Water said its net income increased by 7 percent to P4.6 billion in the January to September period from P4.3 billion in the same nine months of last year.

The increase was driven largely by operating revenues growing by about the same level to P12.2 billion from P11.5 billion in 2013.

The bulk of Manila Water's operating revenues comprises water bills, which account for 79 percent of the total. The rest comes from environmental and sewer charges, connection fees, and management contracts.

The improved operating revenue was brought about by a 3.5 percent growth in the billed volume at the east zone concession of state-run Metropolitan Waterworks and Sewerage System.

The Ayala-led company derived 88 percent of its earnings from the MWSS concession.

Besides growth from its Metro Manila and Rizal operations, contribution from the utility's other domestic subsidiaries rose 48 percent year-on-year to P1 billion.

Likewise, Manila Water's subsidiaries in Vietnam --Thu Duc Water and Kenh Dong Water, together with Saigon Water Infrastructure -- contributed P263 million in earnings, up 27 percent from the previous year.

Manila Water aims to spend P5 billion this year for the rehabilitation and construction of facilities to improve water and sewer services in its MWSS concession area.

- Interaksyon