Tuesday, 18 June 2013 08:00 Published in Headlines
Petitions for in-creases in the rates of private water conces-sionaires by as much as P6 per cubic meter be-fore the Metro-politan Waterworks and Sewerage System (MWSS) were branded as unjustified by cause-oriented groups during public consultations held over the proposal.
The group Water for the People Network (WPN) called the petition of private water concessionaires Maynilad and Manila Water for rate increases unjustified since the two firms are already earning tremendously.
The group, after attending the public consultations of the two concessionaires last week, said “the supposed public consultations stirred more questions than answers to the concerns of consumers regarding the rate hikes. Maynilad Water Services Inc. and Manila Water failed to give acceptable justifications and practically admitted that the rebasing is all about their profits.”
The petitions of both firms were on top of the rate adjustments that will be undertaken on July 3 supposedly as a result of currency revaluation.
Maynilad is raising water charges by 17 centavos per cubic meter while Manila Water is cutting its rates. Maynilad, the west zone concessionaire, cited in a statement the weakening peso for the increase which will reflect in the August bill of its customers.
The Maynilad rate will increase to P46.73 per cubic meter from the average P46.56 per cubic meter rate in its franchise area.
A household consuming 10 cubic meters or less monthly will have their water bills increase by 39 centavos from P119.12 to P119.51, while those consuming 20 cubic meters every month will have to pay P423.82, a difference of P1.47.
East zone concessionaire Manila Water, in contrast, is cutting its rates by 54 centavos per cubic meter in July due to the foreign currency differential adjustment (FCDA).
“The FCDA component of the water bill will be adjusted to negative 0.37 percent of the second quarter of 2013 to negative 1.97 percent of the basic charge for the third quarter of 2013,” Manila Water reported to the stock exchange.
WPN, citing a study by research group IBON, said that private concessionaires are earning profits at an unreasonably rapid pace.
For instance, Maynilad and Manila Water are earning beyond the 12 percent limit imposed on public utilities using the return on rate base (RORB).
Estimates peg the RORB of the concessionaires at more than 14 percent, which concessionaires justify by claiming that they are not public utilities, and thus not covered by the cap.
Private concessionaires, however, are contracted by the Metropolitan Waterworks and Sewerage System (MWSS) which is a public utility, the functions of which include the delivery of water services and charging tariffs on the customers.
According to WPN, public utilities are naturally imbued with public interest because of the type of services they provide, which explains the RORB limit.
The rate base is computed by adding up the value of all the assets used in the operation of the public utility and from it, the allowed rate of return, for instance 12 percent, is calculated.
Thus, the RORB of Maynilad and Manila Water could further go up beyond the estimated 14 percent if the total value of the old MWSS assets already built prior to privatization is excluded.
Using the return on equity (ROE) as standard, Maynilad and Manila Water also rakes in profit beyond the limit set on public utilities.
It is estimated, for instance, that Manila Water has an ROE of around 19 percent while Maynilad has about 45 percent. These are way higher than the ROE of those in other public utilities such as telecommunications (16 percent) and electricity (15 percent).
The ROE is a measure of profitability wherein the net income is computed as a proportion of the equity or the investments poured in by the investors.
Maynilad and Manila Water have a very high ROE because of the high tariffs they set. This is while a large chunk of the cost of MWSS privatization is financed by loans (which are fully passed on to consumers) and not by their actual investments.
WPN said since the last rate rebasing in 2007, the profits of Maynilad have been growing by 48 percent every year while Manila Water, by more than 15 percent.
“In 2012, Maynilad reportedly earned a net income of about P6.8 billion, while Manila Water earned P5.44 billion,” the group said.
While the profits of the water firms are ensured, all the costs are shouldered by the consumers through skyrocketing water rates, according to the group.
This has seriously undermined the people’s right to water and sanitation while the promise of improved services under privatization has not been achieved, it said.
Tuesday, 18 June 2013 08:00 Published in Headlines
There was an error on the designation of Associate Justice Marvic Leonen during an international judicial forum but there wasn’t any “outburst” over the mistake, the Supreme Court spokesman speaking for the magistrate said.
Leonen, according to a newspaper report, walked out after an outburst during the 10th International Judicial Colloquium on Insolvency at the Hague in the Netherlands last month after he was referred to as a Court of Appeals (CA) justice. SC Public Information Office chief and spokesman Theodore Te said the report was “totally wrong and there were gross factual inaccuracies in the report.”
Te said he was authorized by Leonen to speak on the matter.
Based on the report, Leonen allegedly had an outburst after he was erroneously referred as an Associate Justice of the Court of Appeals in the application and registration documents of the said event.
The report said Leonen allegedly walked out of the event and boycotted all other corresponding events.
There was really an error, Te said, but there was no outburst.
“His (Leonen) staff sent an email to the American Bar Association (ABA) and informed them of the error,” Te said.
Te added it was later on corrected.
Te said Leonen attended all sessions except for one because he has a migraine.
ABS-CBN, the Lopez media giant where Leonen used to work as a legal consultant, also quoted a well-placed SC source saying the error on the magistrate’s title was corrected before the start of the conference and the organizers had apologized for it.
The most junior of the SC Associate Justices, according to the newspaper report, was described by an SC insider as prone to complaining.
The ABS-CBN source, however, said that no such incident (of an alleged outburst) happened but it was added “the organizers apologized to Justice Leonen and corrected the error prior to the start of the conference. When the conference started, everything was in order.”
The newspaper report quoted insiders citing the petty issue that confronted Leonen who should have let it pass and that “he should not have raised hell about it.”
“Justice Leonen attended all the sessions, and was given an ID that read: ‘Associate Justice of the Supreme Court.’ They were very apologetic. He, however, was unable to attend a work shop session because he was experiencing migraine,” the ABS-CBN source said.
According to the report on Leonen’s outburst at The Hague, the SC magistrate supposedly accused ABA officials of ‘deliberately shaming him’ after he was wrongfully referred to as Court of Appeals Justice”.
The report also said Sandra Mae Casal-Rapatan, a member of the magistrate’s staff, “raised the issue and lodged a complaint before the ABA organizers as ordered by her boss.”
Leonen had said that trivial matters should not be the focus in judging the Supreme Court as an institution, but the work it does.
Leonen said “the Supreme Court is an under-studied institution” and it is better to focus on its decisions rather than on trivial matters.
“In our courts today, there are very important issues,” Leonen said.
He added trivial matters such as the attendance of justices during flag ceremonies should take the back seat.
Leonen said “we are better read than heard and I suppose with the Public Information Office then perhaps there will be more ways for us to actually try to communicate (the rulings of the court) with the general public.”
He also urged the public to mine the more important data which are the cases being filed and decided on in the SC.
“We are not good justices if we are not readable. Gone should be the days when we have Supreme Court justices who write kilometric sentences,” Leonen said.
As justices, “we can come out with the result but we should reflect a second time and see its effect in the real world. It is important that the court is grounded… It is important that we understand that law as a discipline has ceased to be autonomous.”
He added: “Our decisions are not just academic statements. We decide cases that have implications in the present while being precedents in the future. Our pronouncements transcend the term limits of the legislature and the executive.”
Government authorities have shifted to retrieval operations from search and rescue for the seven still missing passengers of the ill-fated M/V Lady of Mt. Carmel which sank off the waters of Burias Island in Masbate last Friday.
Director Raffy Alejandro, Office of Civil Defense-5 (OCD-5) head, said assets and elements of the Coast Guard and Navy have stopped scouring the area where the roll on-roll off (Roro) vessel sank effective 9 a.m. yesterday.
“We have shifted from rescue to retrieval. That was what agreed upon during the meeting earlier (Monday),” he added.
Alejandro said the shift of operation was prompted by the negative results of the massive search and rescue efforts.
“We have three days of extensive search and rescue operations, yielding negative results, using five aircraft, four gun boats,” he added.
According to the official, even small fishing boats joined the search and rescue operations but the efforts were in vain.
The OCD-5 chief said that under the retrieval operations, authorities would just wait for reports of any sighting along coastal areas.
“It’s more on monitoring, no more scouring,” Alejandro added.
The vessel mysteriously sank off the waters of Burias Island in Masbate around 5 a.m. Friday, resulting in the death of two passengers.
Seven of the 70 persons aboard the ill-fated vessel remained missing.
“Hopes are still there but it’s more of by chance,” said Alejandro, stressing the search and rescue operations covered all the islets in the area to check but there were no sightings.
The sinking of the ferry has raised questions as it came apparently in clear weather and smooth seas. Survivors are also reported to have accused the crew of not attending to them as the ship was sinking.
Families affected by the sea tragedy are also asking the Maritime Industry Authority (Marina) to suspend the Medallion Shipping Lines, the operator of the ill-fated vessel.
But Marina Administrator Maximo Mejia Jr. remained adamant in simply issuing a show cause order to the ship owner.
According to him, Medallion Shipping Lines will be subject to questioning and investigation on the mishap of its Roro vessel.
“The owners will have the time to present their case and explain why the accident happened and why their franchise will not be taken from them,” Mejia said.
The decision was a reversal of former Transportation and now Interior Secretary Manuel Roxas’ policy to suspend operations of involved shipping companies at once following a mishap.
Marina’s Legal Affairs Office head Jabeth Dacanay said in a separate radio interview, however, that the recent Marina order is based on Republic Act 9295 or Domestic Shipping Development Act that requires involved shipping company to be given “due process.”
“We can’t just rush things and suspend the company without proper basis,” Dacanay said.
Dacanay added the operating license of Medallion Shipping Lines may be terminated once proved that it has committed gross negligence to cause the tragedy.
She also said the vessel’s crew and their mother company were directed to explain within 72 hours. Mario J. Mallari, Jason Faustino and Gina P. Elorde
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