Category: Public Health

IN THE BEGINNING, there was water, a public service.

In 1997, water service came under private control.

S1xteen years hence, are we better off, with good and ample water supply, and service priced at reasonable rates?

Or, with regulators and water firms now fighting over taxes and disallowed expenses, and water rates likely to rise again, are we back to where we started?

Read back:

How it all started: Loaves, fishes, and dirty dishes

Before 1997, this was situation: Low pressure and illegal water siphoning caused contamination in the pipes, waterborne diseases were common, and the Metropolitan Waterworks and Sewerage System (MWSS) was among the most unpopular agencies of government.

In 1995, the MWSS served only about two-thirds of the nearly 11 million people living in Metro Manila and nearby towns. A full 3.6 million did not have running water. The utility lost more than half of its water — and millions of dollars in revenue — to leaks and theft. And service was erratic, often shutting off during the day.

But in 1995, too, there were 480 cases of cholera in Manila, compared with 54 cases in 1991, according to the Department of Health. Reports of severe diarrhea-causing infections peaked in 1997 at 109,483 — more than triple the 1990 number. Coupled with the prospect of water shortages, these disease outbreaks created an atmosphere of crisis that convinced people to accept a private sector role in the operation of the water utility.

In 1997, the Manila Water Corp. and Maynilad Water Services Inc. won concessions to take over Manila’s waterworks, splitting the metropolis into western and eastern water zones. Although water regulators dispute exact figures, within five years the companies had connected about 2 million more people to the network.

(When they won their concession contracts in 1997, Maynilad Water was owned by the Lopez family and Ondeo, a subsidiary of the French water company Suez, and Manila Water, by the Ayala family. Today, the Metro Pacific and Consunji groups own Maynilad, while the Ayala family has remained in Manila Water.)

In 2003, six years after the Maynilad and Manila Water took over, what was touted to have been a “miracle” in the water sector had started to look prosaic, a virtual mirage. Many of the old problems — debts, underfunding, broken pipes and water theft — have resurfaced and even worsened. And the system itself was starting to crumble yet again.

Water losses, the decades-old bane of the MWSS that eventually prompted its privatization, have remained high and even worsened in the western half of the metropolis. This has perpetuated a chronic shortfall in water supply.

The cost of water tripled following a series of rate increases imposed starting in 2001. In January 2003, rates were to jump a further 81 percent in the east zone and 36 percent in the west zone.

Six years ago in 2003, MWSS regulators had started to notice some things truly odd: The private companies increasingly make their own rules. Having privatized the water, government regulators say they are powerless to impose restrictions or demands on the companies who generally do as they please.

Read our latest report:

* Tough love: MWSS, water firms clash over taxes, disallowed expenses

* Sidebar: What is rate rebasing?

In 2003, the International Consortium of Investigative Journalists (ICIJ) launched a global investigative reporting project, “The Water Barons” in half a dozen countries, which have seen “the explosive growth of three private water utility companies in the last 10 years.”

The situation, ICIJ said, “raises fears that mankind may be losing control of its most vital resource to a handful of monopolistic corporations.”

The Philippine report titled “Loaves, fishes, and dirty dishes” was authored by PCIJ Fellow Roel Landingin.

In large measure, the ICIJ reports are prescient in all the fear and concerns they raised. What the reports said 10 years ago had turned into real-life situations and problems.

In Europe and North America, ICIJ wrote in 2003, analysts say that, “within the next 15 years these companies will control 65 percent to 75 percent of what are now public waterworks.”

But because they have worked closely with the World Bank and other international financial institutions “to gain a foothold on every continent,” these companies “aggressively lobby for legislation and trade laws to force cities to privatize their water and set the agenda for debate on solutions to the world’s increasing water scarcity.”

What was the companies’ pitch? “The companies argue they are more efficient and cheaper than public utilities.”

What was the critics’ lament? “Critics say they are predatory capitalists that ultimately plan to control the world’s water resources and drive up prices even as the gap between rich and poor widens.”

What was everyone’s worry? “The fear is that accountability will vanish, and the world will lose control of its source of life.”

The world’s — and the Philippines’ — water woes from 10 years ago linger still.