QC court orders MWSS to indemnify Maynilad

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Customers of Maynilad Water Services Inc. may pay higher water rates this year after the Regional Trial Court of Quezon City ordered the immediate implementation of Maynilad’s final award in an arbitration case. 

Metro Pacific Investments Corp., parent company of Maynilad, said in a disclosure to the stock exchange that the Regional Trial Court Branch 93 of Quezon City, in a decision dated August 30, granted its petition to enforce the arbitration award following the refusal of Metropolitan Waterworks and Sewerage System to implement it. 

The final award upheld the 13.41 percent rebasing adjustment that Maynilad proposed from January 1, 2013 to December 31, 2017. 

Metro Pacific said once the RTC decision becomes final and executory, Maynilad’s 2017 average basic charge would increase by 9.89 percent, or an average of P3.41 per cubic meter of the 2017 average basic charge of P34.51 per cubic meter. 

For households with monthly water consumption of 10 cu.m. or less, this would mean an increase of P11.56 in their monthly bill from P118.61 to P130.18. 

Maynilad president Ramoncito Fernandez

For those with monthly water consumption of 20 cu.m., the additional rate will be P43.76 per month from P444.29 to P 488.05, or an increase of P2.19 per cu.m.

The tariff increase is expected to boost Maynilad’s claim against the government, as recently determined by a three-man arbitral tribunal that unanimously upheld Maynilad’s claim against the Philippines.

Maynilad president Ramoncito Fernandez said the decision “confirms that the concession Aareement works, and restores investor confidence in the public-private partnership program of the government.” 

“This also ensures the continued implementation of Maynilad’s capital expenditure projects that are intended to benefit further our customers,” said Maynilad. 

Fernandez, however, said that the government coiuld still appeal the court’s decision. 

“They [MWSS] can still appeal. There are many ways to implement that [rate hike] that is why we are closely coordinating with the government,” said Fernandez. 

Earlier this year, the three-man Arbitral Tribunal unanimously upheld the company’s claim against the government and ordered the state to pay P3.42 billion for losses incurred from March 11, 2015 to August 31, 2016.

The tribunal, in a decision dated 24th July 2017, upheld the validity of Maynilad’s claim against the government, through the Department of Finance, to compensate the company for the delayed implementation of tariffs for the rebasing period 2013 to 2017.

The concession agreement stipulates that the government should indemnify Maynilad of any losses resulting from a delay in implementing any increase in the standard rates.

The tribunal ordered the government to reimburse Maynilad the amount of P3.4 billion, without prejudice to any rights that Maynilad may have to seek recourse against MWSS for losses incurred.

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