Manila Water: passing the cost of investment to consumers?

Posted on March 8, 2008

The subdivision where we live in has excellent water supply. It is actually one of the things that Ramil and I immediately liked while scouting for a house we can rent. Considering that water in the hills of Antipolo is a common problem, our 24-hour water supply with pressure strong enough to reach up to the third floor of a house, is such a luxury.

A few months ago though, Manila Water started laying pipes along the Ortigas Avenue extension. Some people in the Antipolo area were optimistic because it means the potential for stronger and consistent water supply. Since we have nothing but good words about our current water supply, we were indifferent towards it.

Just this morning though, I attended the subdivision’s homeowners association meeting regarding the project proposal of Manila Water. According to the guy handling the project, there’s an order from National Water Resources Board (NWRB) to stop the operation of deep wells that’s why they are proposing that we get our water from them. However, they would have to do a lot of pipe-laying inside the subdivision and the whole project would cost 4.4 million PhP. There are currently 259 households inside the subdivision out of a total of 600 lots. The 4.4 million will be divided among the 259 households which means each would have to pay a one-time fee of around 17,000 PhP for the pipe-laying. Excuse me? Will they not be earning from putting their pipes inside our subdivision? Will they not have 259 additional consumers? Haven’t they heard of risks of investment?

Everyone was indignant of course. Sun Cable paid around 25,000 PhP to the homeowners association so that they will be allowed to install lines inside the subdivision. GlobeLines paid around the same amount to do the same. But here comes Manila Water telling us to buy water from them and yet we have to shoulder the cost of providing it. Huh? I would wholeheartedly agree if they can prove to me that they have absolutely 0% profit from selling us water. Correct me if I’m wrong but if you’d like to start your own restaurant, you don’t directly pass the expense of constructing and building the restaurant to your future customers. That’s why there’s such a thing as return of investment. What businesses do is to factor in that amount to the cost of the product based on when they plan to get their money back and of course, what’s reasonable to charge to customers. If it’s a very expensive initial investment then it is possible that it would take a lot of years before you get your money back. For a big water company like Manila Water, I’m sure 4.4 million can be easily earned especially since the water they are actually getting from Angat Dam is not that expensive. In other words, they don’t want to wait for several years to start earning money. By passing on the expense of pipe-laying to the consumers, they want to start earning money soon and fast! Considering that they actually have a monopoly of providing water to Metro Manila’s east zone, I’m assuming that they actually earn millions if not billions of pesos.

During the meeting, one of the homeowners asked whether we actually have a choice. The issue of the closure order of deep wells was again brought up. The guy was not very clear on the details of such order but upon arriving home, I searched the internet and I haven’t found anything about it. Based on the meeting, everyone was willing to continue with our current water supply until such time that it would really be closed down. There’s nothing wrong with what we have now anyway.

Now, if the guy we talked to earlier was a salesperson, he can forget about making any sale from us.