Business Headlines

Ayala’s Manila Waterappeals SC ruling on Clean Water: Blames LGUs for non-compliance, warns rates will shoot up by 800%

Manila Water has asked the Supreme Court to reconsider its ruling imposing fines and order to comply with its undertaking under the Republic Act 9275 or the Clean Water Act.

Manila Water has asked the Supreme Court to reconsider its ruling imposing fines and order to comply with its undertaking under the Republic Act 9275 or the Clean Water Act.

In a 55-page motion for reconsideration dated Oct. 2, Manila Water, through lawyer Alejandro Alfonso Navarro, urged the court to consider remanding the controversy to the Court of Appeals or the Office of the Secretary of Environment and Natural Resources or any appropriate government agency to determine unresolved factual issues, including their liabilities and correct fines.

The company argued that contrary to the findings of the Court, the petitioner complied with the provisions of Section 8 of the Clean Water Act (CWA).

The concessionaires have claimed that the delay was not entirely their fault citing the law’s requirement for local government units (LGUs) to provide support water treatment facilities that can be connected to the concessionaires’ systems.

Last August, the SC affirmed the Court of Appeals’ ruling, which found Metropolitan Waterworks and Sewerage System (MWSS), Maynilad and Manila Water liable for violation of Section 8 of the Philippine Clean Water Act particularly its provision requiring MWSS and the two concessionaires to provide wastewater treatment facilities and to connect sewage lines in all establishments, including households, to an available sewerage system within five years upon the effectivity of R.A. 9275 on March 6, 2004.

In the ruling, the SC directed Maynilad and the Metropolitan Waterworks and Sewerage System (MWSS) to pay P900 million, and Manila Water and MWSS another P900 million for non-compliance with the law.

Manila Water insists that under Section 8 of the Clean Water Act, it simply must connect sewage lines existing at the time of the effectivity of the law to then-available sewerage systems within five years from the law’s effectivity on March 6, 2004.

“In other words, the Decision folded-in the 40-year period for petitioner Manila Water to comply with its obligations under the Concession Agreement­ to a mere five years, when the said period under Section 8 of the Clean Water Act was only intended for the interconnection of sewage lines to sewerage systems existing and available in 2004,” it noted.

Manila Water also claimed the required centralized sewerage system would lead to massive hike in rates.

“On the assumption that costs related to the full implementation of the sewerage network are to be recovered by the concessionaires, including petitioner Manila Water, by the end of the Concession Agreement, the fees that ought to be collected from the end consumers (on top of their water consumption) would amount to P26.70 per cubic meter – or a 780.18-percent increase in water rates.,”

The Manila Water pointed out that even the Congress recognizes the “immensity” of the task to provide complete and centralized sewerage system under the Clean Water Act, by mandating not one but several government agencies to implement its provisions, namely, the Department of Environment and Natural Resources, Department of Public Works and Highways, and various local government units.

“Therefore, the only reasonable conclusion is that petitioner Manila Water, as a private entity, cannot be required to assume obligations beyond those set forth in its Concession Agreement. To require petitioner Manila Water do so will not only violate the principles of non-impairment of contracts but will also undeniably constitute arbitrary exercise of police power, contrary to the established tenets of due process.,” the water concessionaire said.

Manila Water told the court that as of Dec. 31, 2018, it has spent a total of P38.5 billion for wastewater projects, higher than the P36.9 billion collected in sewer charges.

Under its concession agreement, Manila Water said it is allowed to recover operating, capital maintenance and investment expenditures efficiently and prudently incurred from its customers.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.