An epidemic of protest vs. pork

THE MARCHERS HAVE YET to take their first step to the Luneta and rally sites in cities across the nation tomorrow.

But already an epidemic of on ground and online protest against pork and budget scams has engulfed the nation, assuring that the marches could draw significant numbers and success.

While most everyone has spoken against the scams, President Aquino and the majority of lawmakers have responded with only minor reforms, or promise of reforms, seemingly impervious to the core content of the citizens’ clamor. In various statements, the citizens have raised similar calls, notably:

– Abolish pork and special purpose funds of all types and names, which lawmakers command and the President controls.

– Conduct an independent and comprehensive investigation into all the pork and budget scams, from the previous to the present administrations.

– Bring to trial everyone from the legislative and executive branches who are behind the abuse and misuse of pork and public funds, regardless of political party affiliation.

– Pass the Freedom of Information Act to assure full transparency and accountability in the use of taxpayers’ money.

The students, faculty members, and administrators of the biggest universities and colleges, and the leaders of the major churches and civil society groups have pledged to the last to send their contingent to the Luneta tomorrow.

In a statement issued on Friday, the Catholic Educational Association of the Philippines (CEAP) called on its 1,252 member schools across the nation to support the citizens’ march.

The academic communities of the University of the Philippines, De La Salle University, Ateneo de Manila University, and other colleges have issued separate statements with similar demands.

The FOI Youth Initiative (FYI), a national coalition of 129 student councils and organizations that is pushing for the passage of the Freedom of Information Act, has also pledged to join the protest march.

The Right to Know, Right Now! Coalition, which counts the FYI among its 160 member-organizations of workers, civil servants, informal settlers, overseas Filipino workers, academics, church groups, businessmen, and civil society groups will also send a delegation to the Luneta.

Days earlier, a joint statement from the Bishops-Businessmen’s Conference, the Makati Business Club, the Catholic Bishops’ Conference of the Philippines-National Secretariat for Social Action, the Citizens’ Congress for Good Governance,, and the Transparency and Accountability Network have raised similar demands of the President and Congress.

On ground and online, the protest movement against pork and budget scams has gained a seemingly unstoppable momentum.

It was, after all, the brilliant idea of some netizens to marshall the ranks of the people to the Luneta tomorrow. By some stroke of both fate and genius, August 26 is also fittingly observed in these parts as “National Heroes’ Day”.

In a report, the Center for Media Freedom and Responsibility (CMFR) gave a lay-of-land story on the forces and the numbers that now make up the people’s campaign against pork and budget scams.

Nearly every news report on the pork scam has triggered “a massive number of Facebook, Twitter, and blog posts”, and tons of photos and video to boot, CMFR noted.

Online art and memes have flourished, and hashtags aplenty have been born, nearly all drawing large numbers of followers.

CMFR said these hashtags include #porkbarrelscam, #PDAFscam, #ScrapPork, #PDAFKalampag, #PorkBarrel, #TayoAngBoss, #OnePinoy, #MillionPeopleMarch, #ProtestaNgBayan, #YesConchitaCan, among others.

“As of Aug. 23, Change.org — a petition platform online — shows a total of 19 petitions with an estimated total of 26,942 signatures supporting various campaigns on the PDAF issue,” CMFR said.

These petitions include those uploaded by the Former Senior Government Officials (FSGO), with 15,802 supporters; the Citizens’ Congress for Good Governance (C2G2), Inc., with 2,840 supporters; and Ang Kapatiran Party (Kapatiran sa Pangkalahatang Kabutihan Party/Alliance for the Common Good), with 156 supporters.

Individual netizens have mounted similar petitions, CMFR said, including Lawrence Salvador with 4,489 supporters, and John Alfred Lucot, with 1,012 supporters.

By all indications, an epidemic of protest against pork and budget scams will carry to certain success the people’s march tomorrow at the Luneta and other cities of the nation.

At the very least, the march could serve as a national collective shout-out, one of the citizens claiming their rightful power over their leaders so the latter may follow as instructed — abolish pork, investigate and punish all the guilty, and pass the FOI law promptly.

But what happens next after the march?

To be sure, one march will not usher in transparency, accountability, and good governance in full glory. Or even assure the death of pork. It seems like everyone needs to wait, watch, and rail and wail against pork and budget scams for much longer, until real results and reforms come.

Wise counsel comes from two great writers.

To the leaders:

“You only have power over people so long as you don’t take everything away from them. But when you’ve robbed a man of everything, he’s no longer in your power – he’s free again.”

– Aleksandr Solzhenitsyn, Russian novelist, historian, and author of The Gulag Archipelago

And to the citizens:

“There may be times when we are powerless to prevent injustice, but there must never be a time when we fail to protest.”

- Elie Wiesel, Romanian born American writer, Nobel Prize for Peace winner in 1988

PNoy reverses self: Pork gone for good or just a makeover?

THREE DAYS after mounting a vigorous, if effete, defense of the Priority Development Assistance Fund (PDAF) or pork barrel, President Aquino today reversed his position and said in no uncertain terms that “panahon na pong i-abolish ang PDAF.”

But that is perhaps the only clear and cogent portion of his statement.

The President also spoke about revising and reviewing the PDAF system that he said Budget Secretary Florencio Abad will work out with his partymates and allies in Congress, Senate President Franklin Drilon and Speaker Feliciano Belmonte Jr.

The good thing is the President said consumable soft projects, and small and quickie infrastructure items will have to go. The good thing is the President said that some pork-tainted government-owned and -controlled corporations will now be shut down.

But it would have been better if the President had also clarified exactly what are the new procedures and checks that he deems important to assure greater transparency and true accountability in the use of pork funds — from project identification to disbursement of funds to review of project completion.

Pork, the President as a senator had said before, is “a great equalizer.”

Lawmakers, he had said, are somehow more appreciated (and could assuredly be elected on and on) if they could deliver goods and services to their constituents.

Pork has also oiled the legislative wringer many times over, in favor of or against bills that the President had wanted to rush or ruin.

Thus far, the DBM’s transparency initiative on pork has largely been limited to specifying a menu of projects that could be funded with pork. How the funds are spent, and who gets how much in cuts, the DBM has not assured.

And what about the P200-million pork barrel allocation that the President has accorded Vice President Jejomar Binay — on the latter’s request and with endorsement from both Drilon and then Senate President Juan Ponce Enrile?

Binay is not a lawmaker but he got his pork kitty beginning 2011 and how he disburses it are data not disclosed on the DBM’s website. Will Binay continue to feast on pork?

The question: Is the President saying pork barrel is gone for good or will it just metamorphose into a new, revised, rechristened, and possibly less fatty menu?

Since it was created in 1990 by lawmakers as a purse from which lawmakers could dip to roll out their pet projects, pork has been renamed twice at least — from CDF (Countrywide Development Fund) to CIA (Congressional Initiative Allocation) to PDAF.

Is this a moment for celebration or just a little reprieve of sorts for all those who love, and love to hate, pork (the barrel, not the swine)?

Read between the lines — the full text of the President’s statement. The medium is the message, or the message is the massage?

STATEMENT OF HIS EXCELLENCY BENIGNO S. AQUINO III
PRESIDENT OF THE PHILIPPINES
ON THE ABOLITION OF PDAF AND BUDGETARY REFORMS
MALACAÑAN PALACE, MANILA, AUGUST 23, 2013

Taong 1990 nang binuo ang tinatawag na nating PDAF ngayon para sa isang marangal na layunin: Ang bigyang-lakas ang inyong mga Kinatawan sa Kongreso, upang tumukoy ng mga proyektong hindi kayang pondohan ng mga LGU. Wala pong mali o masama sa polisiyang ito. Ang mali, ang masama, at ang siya ngang ikinagagalit ng taumbayan, ay ang pagsasabwatan sa pagitan ng isang pangulong handang makipagtransaksyon para manatili sa kapangyarihan; mga mambabatas handang makipagkuntsabahan; kung nariyan ang kooperasyon ng burukrasya; at mga mamamayang tila namanhid na sa panlalapastangang ginagawa sa kanila– kung nagsama-sama po ang mga sangkap na ito, maaaring maabuso ang PDAF. Kailangan nating maniguradong hindi na maaabuso ang sistema.

Akala po ng iba, pera nila ang PDAF, na puwedeng gastusin kung paano nila gusto. Pero mali po ito: Pera ng bayan ang pinag-uusapan dito, at sa bayan dapat– at hindi sa iilang gahaman lamang– ang pakinabang nito. Nakakagimbal nga po ang mga rebelasyon tulad ng mga nakapaloob sa COA Special Audit Report ukol sa paggamit ng PDAF noong 2007 hanggang 2009, na inilabas nitong nakaraang linggo. Dalawang bagay po ang malinaw na kailangan nating gawin sa panahong ito.

Una, ang panagutin ang mga umabuso sa sistema. Kahapon, iniulat ko sa inyo: Inatasan ko ang DOJ, sampu ng lahat ng ahensya ng ehekutibo sa ilalim ng Inter-Agency Anti-Graft Coordinating Council, o IAAGCC, na mag-aambagan at magtutulungan upang mapabilis ang proseso, mula sa imbestigasyon, hanggang sa pag-usig, hanggang sa pagpapakulong, at pati na ang pagbawi ng ilegal na yaman. Malinaw ang aking direktiba sa lahat ng ahensya at kawani ng gobyerno: Ibigay ang inyong buong tulong at kooperasyon upang mahanap ang katotohanan, at nang mapanagot ang dapat managot.

Buong-buo po ang kumpiyansa ko sa integridad nina Ombudsman Conchita Carpio-Morales, Kalihim Leila M. de Lima ng DOJ, at Chairperson Grace Pulido-Tan ng COA; alam kong wala silang kikilingan. Kinakatawan nila ang panunumbalik ng tiwala ng publiko sa mga institusyong kanilang pinamumunuan.

Iyan po ang balangkas ng ating unang layunin. Ang ikalawa: maghanap ng mas mainam na paraan upang siguruhing ang pera ng taumbayan ay mapupunta sa taumbayan lamang. Lilinawin ko po: Simula pa lamang, pilit na tayong nagpapasok ng reporma upang bawasan ang diskresyon, na siyang ugat ng labis at maling paggamit ng PDAF. Naniniwala tayo: kung hayag ang proseso, mababawasan din ang pang-aabuso sa sistema. Inatas po nating itala sa Pambansang Budget kung magkano ang PDAF na natatanggap ng bawat mambabatas, at ipinagbawal na rin natin ang congressional insertions. Partikular na lamang ang menu na puwedeng paglagyan ng PDAF, hindi katulad dati kung kailan inilalagay lamang ito sa kung saan-saan. Hinihingi na rin natin ang mga detalye ng proyekto, di gaya ng nakaraan kung kailan kahit malawak ang depinisyon ay naaaprubahan ito. Real time na ring ina-upload sa website ng DBM ang listahan ng proyektong napopondohan ng PDAF, kaya’t malaya itong nabubusisi ng madla. Pagdating naman sa bidding, lahat ng bid notices at awards ay nakapaskil na rin sa Philippine Government Electronic Procurement System o PhilGEPS.

Naalala ko nga po noong Senador ako. Ang budget, nakalaan para sa January 1 hanggang December 31. Noong 2007, naaprubahan ito, Abril na. Ibig sabihin, mula Enero hanggang Abril, carry over ang budget mula sa nakaraang taon. Di ba makatuwiran na dahil na-reenact ang budget, tanggalin na rin sa budget ang pondo para sa mga buwan na nakalipas at nagastusan na? Natalo ang mungkahi ko — kaya bumoto ako ng “No” sa budget ng 2007. Tinatayang 36 billion ang biglang naging savings noong taong ito — saan naman po kaya napunta ito?

Kaya nga po, mula nang maupo tayo, maaga na ring isinusumite at inaaprubahan ang budget, upang hindi na ito paulit-ulit na ma-reenact, na maaari ring magamit bilang instrumento ng pang-aabuso. Sa araw matapos ang SONA, isinusumite na namin ito sa Kongreso; naaaprubahan po nila ito bago matapos ang taon, kaya’t nabawasan na rin ang pagkakataong makalikot ito at mapagkakitaan.

Sa kabila po ng mga repormang ito, nakita natin sa mga ulat na lumabas nitong mga nakaraang linggo: kailangan pa ng mas malaking pagbabago upang labanan ang mga talagang pursigidong abusuhin ang sistema. Panahon na po upang i-abolish ang PDAF.

Ngayon, bubuo tayo ng bagong mekanismo upang matugunan ang pangangailangan ng inyong mga mamamayan at sektor– sa paraang tapat, gamit ang tama at makatuwirang proseso, at nang may sapat na mga kalasag laban sa pang-aabuso at katiwalian.

Katuwang nina Senate President Frank Drilon at Speaker Sonny Belmonte, sisiguruhin kong bawat mamamayan at sektor ay makakakuha ng patas na bahagi ng pambansang budget para sa serbisyong pangkalusugan, scholarship, proyektong lumilikha ng kabuhayan, at lokal na imprastruktura. Makakapagmungkahi ng proyekto ang inyong mga mambabatas, ngunit kailangan itong idaan sa proseso ng pagbubuo ng budget. Kung maaprubahan, itatala ang mga ito bilang mga line item, alinsunod sa mga programa ng Pambansang Pamahalaan. Mapapaloob ito sa batas bilang Pambansang Budget– hihimayin ang bawat linya, bawat piso, bawat proyekto, gaya ng lahat ng iba pang programa ng inyong pamahalaan.

Dagdag pa rito, ang mga proyekto, at ang pagre-release ng budget para sa mga ito, ay magkakaroon ng mga sumusunod na patakaran laban sa katiwalian:

1. Itutuloy natin: Kailangang manggaling sa isang limitadong menu ang mga proyektong popondohan.

2. Ngayon, bawal na ang mga consumable na soft project tulad ng fertilizers, punla, gamot, medical kits, pustiso, paliga, training materials, at iba pang mga bagay na hindi masusuri kung totoo ngang may kinahihinatnan, o kung nagmumulto at pinagkakakitaan lang naman pala.

3. Ngayon, bawal na rin ang mga panandaliang imprastruktura, o kaya’y mga dredging, desilting, regraveling, o asphalt overlay project.

4. Ngayon, bawal na ring padaanin ang pondo sa mga NGO at piling GOCC tulad ng ZREC at NABCOR. Bubuwagin na po ang mga GOCC na ito at iba pang tulad nila, na paulit-ulit na ginamit sa kuntsabahan, at parang wala namang ibang silbi kundi ang maging instrumento ng katiwalian.

5. Ngayon, limitado na sa distrito o sektor ng mambabatas na nag-sponsor ang kanyang panukalang proyekto.

6. Ipagpapatuloy natin ang tapat at bukas na bidding para sa bawat proyekto; kailangang ipaskil sa Philippine Government Electronic Procurement System o PhilGEPS ang lahat ng mga bid notices at awards.

7. Patuloy din po: Upang masubaybayan ng taumbayan ang implementasyon ng mga proyekto, ihahayag ito nang buo sa website ng DBM at kaukulang ahensya, pati na sa National Data Portal ng gobyerno (www.data.gov.ph).

Inatasan ko na si Secretary Abad ng DBM na kumonsulta kina Speaker Belmonte at Senate President Drilon upang pandayin ang mekanismo, at isumite ito sa akin. Ilalatag natin ito upang ang mga alokasyon sa bawat distrito ay mapabilang na sa ating Pambansang Budget simula sa panukalang budget ng 2014.

Gagana lamang po ang sistemang ito kung makikiisa at makikilahok kayo. Ihahayag po nang buo ang impormasyon; suyurin at kilitasin po natin ito. Nananawagan akong makiambag at magsikap ang bawat isa, gaya ng pakikiambag at pagsisikap ng inyong gobyerno. Sama-sama nating pagtibayin ang pananagutan at katapatan, upang masigurong ang pera ng bayan ay ginugugol sa paraang makatarungan at tunay ninyong napapakinabangan.

Maraming salamat, at magandang araw.

*Please check against delivery.
**English Translation of the statement to follow.

SOURCE:

Office of the Presidential Spokesperson
3/F New Executive Building,
Jose P. Laurel St., Malacañang, Manila
Tel. No. (+632) 736-0719
Fax No. (+632) 735-6167
Email: spokesperson@malacanang.gov.ph

Price, profit, and water tariffs: Ne’er the twain shall meet?

PRICE AND PROFIT.

Or, price vs. profit?

These are the two sides of the water equation that is at the heart of ongoing “rate rebasing” talks between the Metropolitan Water and Sewerage System (MWSS) and the two private water concessionaires serving the capital region and surrounding areas.

A fortnight ago, they engaged in a noisy row over the possible disallowance of claims for income tax payments, but yet again they are locking horns.

This time, it is over the level of guaranteed returns that the water companies are entitled to get — a major factor in setting water tariffs.ntitled to get — a major factor in setting water tariffs.

How this debate ends will determine not only what price customers will have to pay for water but also how much profit the water firms could make in the next five years.

Manila Water Co., which provides water service in the eastern half of Metro Manila and surrounding areas, wants to increase rates by P5.83 per cubic meter or 21 percent to P34.12 per cubic meter.

Maynilad Water Services, Inc., which runs the water system in the west zone, is proposing to increase average basic rates by P8.58 per cubic meter or 25 percent to P42.55 per cubic meter.

PCIJ Figure 2. ASEAN Water (1)

Since MWSS was privatized in 1997, water rates have soared nine-fold in Manila Water’s east zone and more than six-fold in Maynilad’s west zone.

Apart from being allowed to recover past expenses and future costs from tariffs paid by customers, the two water companies are also allowed to earn a return on those cash outflows.

For the next five years until 2017, they want a return, also called the appropriate discount rate or ADR, of 8.99 percent, according to people privy to the discussions.

However, MWSS water regulators find the proposed discount rate of 8.99 percent too high, given that yields on long-term Philippine government bonds have plummeted, especially in the last five or six years as the country’s economic fundamentals have gotten better alongside falling U.S. interest rates.

The regulators are said to have initially set the ADR at 6.16 percent, according to people familiar with the discussions between the MWSS and water firms.

PCIJ Figure.. THE WATER FIRMS' RETURNS. QUICK TO RISE, SLOW TO FALL, july 2013 (1)

In plain terms, water rates increased faster in the early years of privatization as a result of big jumps in the ADR, because of higher interest rates and the peso’s decline.

Today, amid lower interest rates and a stronger peso, the returns of water firms are expected to also fall proportionately, thus tempering any increase in the price of water.

However, by many accounts, the water firms’ proposed ADR of 8.99 percent does not seem to reflect this changed reality.

So, what “guaranteed returns” for water service is best in the next five years?

Should it be 8.99 percent, according to the water companies?

Or, should it be 6.16 percent only, according to MWSS’s estimate?

Is there a perfect balance here between the profit that water firms should make, and the price that customers should pay for water, in the next five years?

Read our latest report, MWSS, water firms clash over ‘guaranteed returns’.

Check it out also on BusinessWorld Online and ABS-CBNnews.com.

‘Loaves, fishes, and dirty dishes’: Water woes in 2003 linger still

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.

Tough love? MWSS, water firms clash over taxes, disallowed costs

WATER IS LIFE, indeed, but it is not cheap, not free.

Water is a story that has hogged the headlines in recent weeks. And that is all because of a new petition to adjust water service fees, amid a new round of rate rebasing talks between the government and the two water firms in Metro Manila, to the vigorous protest of consumer groups.

Water, indeed, is about big money and big players that had been allowed by government to pass on to consumers the big amounts of income taxes due from their operations.

This time, however, the government regulator, the Metropolitan Waterworks and Sewerage System (MWSS), seems poised to do its job — regulate the water firms.

The MWSS has asked for the financial records and documents of the water firms, issued disallowance notices for some of their expenses and donations to charity, and questioned the fat salaries of their executives.

Most important of all, in an apparent show of tough love, the MWSS seems ready to stop the water firms from billing their income taxes as operations costs — billions of pesos that they have been passing on to consumers since 2007.

This report by PCIJ Fellow Roel Landingin comes with two data graphics, and a sidebar about what rate rebasing is.

Read our latest report:

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

* Sidebar: What is rate rebasing?

Manila Water, whose income tax holiday ended in 2006, has effectively been passing on its income taxes to consumers from 2007 to 2012, said water regulators. Its total provision for income taxes during the six-year period was P7.3 billion, according to the company’s annual reports submitted to the Philippine Stock Exchange.

Maynilad, which was losing money for a number of years, enjoys an income tax holiday until 2016. The rates approved for Maynilad, however, included a provision for income taxes as its income tax holiday was approved after the rates were set in 2008. Its provision for income taxes amounted to only P1.7 billion from 2007 to 2011, the latest available filed with the Securities and Exchange Commission.

This month the MWSS is expected to announce water rate adjustments. The new rates are supposed to take effect next month. Consumer groups have asked the Supreme Court to freeze water rates, with a plea for a temporary restraining order, but the tribunal has not acted on their plea.

And while the MWSS resolution on income taxes will cut water rate adjustments, regulators cannot yet say if it is big enough to actually lower prevailing rates or may simply temper tariff increases.

The regulators also have to adjust the applied discount rate (ADR), the guaranteed return that water companies are allowed to earn, to take into account the change in the water firms’ tax status. This could partially offset the rate-lowering effect of disallowing them from passing on income taxes to customers.