Int'l tribunal orders PHL to pay Maynilad P3.424B in rate adjustment losses

An international tribunal has ordered the Philippine government to pay Maynilad Water Services Inc. P3.424 billion in revenue losses from unimplemented rate adjustments.

"The tribunal ordered the republic to reimburse Maynilad the amount of P3,424,690,000 for losses from March 11, 2015 to August 31, 2016, without prejudice to any rights that Maynilad may have to seek recourse against MWSS (Manila Waterworks and Sewage System) for losses incurred from January 1, 2013 to March 10, 2015," Maynilad told the Philippine Stock Exchange on Tuesday.

"Further, the tribunal ruled that Maynilad is entitled to recover from the republic its losses from September 1, 2016 onwards. In case a disagreement on the amount of such losses arises, Maynilad may revert to the tribunal for further determination," the company said.

In March 2015, Maynilad filed a case in Singapore after the Philippine government snubbed its claim of P3.44 billion since regulator MWSS declined to implement a water rate increase sought by the company.

MWSS administrator Reynaldo Velasco declined to comment, other than saying that his office has not yet received a copy of the decision.

"In the arbitration between the Republic of the Philippines and Maynilad Water Services Inc., the three-man arbitral tribunal, in a decision dated July 24, 2017, unanimously upheld the validity of Maynilad’s claim against the undertaking letter issued by the republic, through the Department of Finance, to compensate Maynilad for the delayed implementation of its relevant tariffs for the rebasing period 2013 to 2017," the company said.

The letter said that the Philippine goivernment must indemnify Maynilad for any loss from a delay in implementing an increase in the standard rates, specifically after the date of implementation in line with the concession agreement (CA) on Feb. 21, 1997.

“We will continue to honor our commitments under the CA and pursue the capital expenditure projects that will improve further the quality of service to our customers, as well as support the government’s initiative in ensuring the sustainability of our country's water resources,” Maynilad president and CEO Ramoncito Fernandez said.

The decision of the tribunal was an affirmation of the trust and confidence that Maynilad has placed in the CA, and in its integrity, which has been responsible for the significantly improved water and wastewater services in its concession area.

In the coming days, Maynilad said it will coordinate and cooperate with the government in finding the most efficient way to implement the judgment. — VDS, GMA News