Maynilad takes water rate hike issue vs. MWSS to Singapore arbitration panel

Maynilad Water Services Inc. is seeking arbitration against the Philippine government for not compensating the water utility firm on revenue losses from unimplemented rate adjustment.

 

"Maynilad served the Republic the Notice of Arbitration and Statement of Claim following the latter’s failure/refusal to pay the amount indicated in the Demand Letters. 

 

"Pursuant to the Undertaking, the arbitration proceedings shall be conducted in Singapore before a three-man panel," Maynilad said in a disclosure to the Philippine Stock Exchange on Monday.

 

Maynilad decided to take matters to an arbitration panel in Singapore after the Philippine government snubbed its claim to be paid P3.44 billion after the Metropolitan Waterworks and Sewerage System Regulatory Office (MWSS-RO) failed to implement a water rate increase in favor of the company.

 

In February, Maynilad invoked a Philippine government undertaking to pay for the losses it supposedly incurred because MWSS continued to refuse the rate adjustments sought by the company.

 

This stemmed from the letters of undertaking which the Republic issued in favor of Maynilad on July 31, 1997 and on March 17, 2010, according to Maynilad.

 

The company said the undertaking provides that the Philippine government indemnify the concessionaire from losses as a result of any delay caused by the Republic or any government-owned agency in implementing any increase in the standard rates beyond the date of its implementation based on the concession agreement.

 

MWSS said it intends to wait for an international arbitration panel to first rule on the case of Manila Water Company Inc. before allowing Maynilad to raise its water tariff.

 

The government made its position clear even after the International Appeals Panel ruled in favor of Maynilad to implement a higher tariff that includes passing the income tax burden to consumers. – Danessa O. Rivera/VS, GMA News