MANILA, March 27, 2004
By Marichu Villanueva and Marvin Sy  - "I would rather go to jail than see my people without clean water."

This was President Arroyo’s response to persistent attacks against her administration for the controversial bailout of troubled Maynilad Water Services Inc.

Speaking in Filipino during the inauguration of the "Patubig ni Gloria" water project in Barangay La Huerta in Parañaque City yesterday, the President paraphrased the words of her late father, former President Diosdado Macapagal, when he was also haled to court for alleged irregularities in the importation of canned sardines.

"He said then that he’d rather go to jail than see his people go hungry," Mrs. Arroyo told La Huerta residents, many of whom are squatter families relying mainly on illegal water connections.

She expressed willingness to face the full consequences of the government’s actions on Maynilad even as Palace officials stressed the President’s immunity from suit as guaranteed by the Constitution.

Mrs. Arroyo said the government’s bailout of Maynilad is meant to protect public interest amid the failure of a losing private utility firm to service its customers.

"I am for transparency under the rule of law and commercial integrity. If there is any document to be opened, then let it be done under conditions defined by the courts," Mrs. Arroyo said.

The President was reacting to calls of presidential candidate Raul Roco, opposition senatorial bet Melanio "Batas" Mauricio Jr., the Makati Business Club and militant groups for the full disclosure of the details of the Maynilad restructuring deal.

Quezon City Regional Trial Court Judge Reynaldo Daway has refused to publicly disclose the rehabilitation deal as he said the details should be limited to the parties involved.

"If there is any document to be opened then let it be done under conditions defined by the court. We have nothing to hide and government acted in the public’s interest at all stages of the transaction," Mrs. Arroyo said.

"Our aim is to protect the people’s right to clean water in the long term and we will continue to fight for this cause. Nothing short of a court order shall deter me from doing my duty to serve the people," she added.

Mrs. Arroyo also argued that the controversy on the Maynilad deal was hatched by her opponents who cannot come up with a good platform of government. That is the reason, she said, why they have to resort to black propaganda and mudslinging.

In a press briefing yesterday, the President’s spokesman, Ignacio Bunye, also slammed the opposition for saying that the government would shoulder approximately P8 billion in concession fees that Maynilad failed to pay.

Bunye stressed that this was pure misinformation as the joint restructuring plan for Maynilad does not indicate that the amount is either a sovereign debt or debt guaranteed by the government.

"No funds of the national government will be used to pay the corporate obligations. There is a payment system (in place) and what should be paid has already been determined," Bunye said.

"Out of the several possible solutions, this solution is deemed the best. We have the employees to think about, we have the consumers to think about, we have the financial community to think about, the international creditors to think about," he added.

Albay Rep. Joey Sarte Salceda, a former stock analyst, defended the deal saying the payment will come from Maynilad’s revenues and not from the national government,

"If MWSI (Maynilad) fails, then it becomes a bad loan just as the government’s stake becomes a worthless paper as well," he explained.

Militant groups, however, asserted yesterday that the government’s bailout of Maynilad will translate to a 32 percent increase in water rates starting in May.

According to Anakpawis, the rate increases will be charged in a new account called the Special Transitory Mechanism (STM) wherein any "losses" suffered by Maynilad beyond the accelerated extraordinary price adjustment (AEPA) approved by the Metropolitan Waterworks and Sewerage System (MWSS) and payment of the loans contracted by the water firm will be charged.

"The STM is like the purchased power adjustment (PPA) in the electricity sector. With this new system, Maynilad and inevitably the Ayala’s Manila Water and smaller water firms can legally arbitrarily jack up their rates on a monthly basis, and consumers would have no choice but to shoulder the increase," the group said.

The Koalisyon ng Nagkakaisang Pilipino (KNP) for its part hit the plan of MWSS to borrow $200 million or roughly P11.2 billion to finance its maturing obligations.

"This plan to borrow a whopping $200 million just to pay off its maturing obligations is one telling mark that MWSS is already neck-deep in debt and that it needs this Maynilad bailout plan like a bullet in the head," KNP senatorial candidate Juan Ponce Enrile said.

Enrile was reacting to the disclosure made by Bangko Sentral deputy governor Amando Tetangco that the Monetary Board had already received MWSS’ borrowing plan.

Surigao del Sur Rep. Prospero Pichay, however, condemned the misuse of the Maynilad issue by the opposition to hit Mrs. Arroyo. He urged the courts and other concerned entities to quickly rule on this and other cases filed by the opposition.

Meanwhile, undeterred by the controversy generated by the government bailout of Maynilad, a consortium led by Ayala Corp., which owns the water concession in Metro Manila’s east zone, has proposed to undertake the P1.86 billion Carmen Water Supply Project (CWSP) in Cebu City.

The consortium, which also include Stateland Inc. and Central Equity Ventures Inc., proposes to "build, finance, design, construct, commission, own, operate and maintain an environmentally friendly water intake structure along the downstream of the Luyang River" in Carmen, Cebu.

Once the project is completed, an average of 50,000 cubic meters of water will be supplied to the Metro Cebu Water District (MCWD), which in turn would distribute it within its franchise area and increase water supply by 35 percent of its current volume.

Unlike Maynilad, which has claimed heavy losses in its concession contract, Ayala’s Manila Water has managed to keep their operations at profitable levels. — With Marvin Sy, Katherine Adraneda, Delon Porcalla

Reported by: Sol Jose Vanzi

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