Wednesday, April 27, 2005

NR0427: Nix Maynilad loan to world bank

Mula sa Tanggapan ni Anakpawis Rep. Crispin Beltran
News Release April 27, 2005
House of Representatives, South Wing Rm 602
931-6615 Ina Alleco R. Silverio, Chief of Staff
Cellphone number 09213907362

Govt shouldn't guarantee Maynilad's loan application
to the World Bank; Maynilad should be nationalized

Anakpawis Representative Crispin Beltran today expressed strong opposition to any and all plans of the government to be the guarantor of the Metropolitan Waterworks and Sewerage System's $125 million loan for a Maynilad Water Services Inc. project and have it included in the World Banks' country assistance strategy.

According to reports, the MWSS through its administrator Orlando Hondrade wrote a letter to the National Economic and Development Authority (NEDA), seeking the government's help in securing a multi-million dollar loan for Maynilad's Revenue Generation and Service Improvement Projects (RGSIP) in the World Bank's CAS.

In a letter dated January 17, 2005, the MWSS proposed only $50 million for Maynilad's RGSIP. Of the total $125 million, the MWSS wants $100 million, the MWSS wants $100 million to be covered by the World Bank with the remaining $25 million to be sourced from Maynilad as local counterpart. The MWSS is asking the government to sponsor the loan, as there are reportedly no more creditors willing to lend money to Maynilad.

The letter also stated that the proposed RGSIP is part of Maynilad's five-year capital expenditure program.

"If the Maynilad is a losing business venture, why should the national government back its bids for loans? This is unsound, illogical business sense. Instead of supporting Maynilad as a guarantor, the national government should buy out Maynilad and take over its operations and have the water industry nationalized," he said. "This way, the business considerations and the financial technicalities will not take precedence over what should essentially be an industry devoted to public service and not for private profit."

Also according to reports, various business entities are vying to acquire Maynilad: among the m the investment bank ING Barings Group, the Ayala group, the International Finance Corp ( the World Bank's investment arm) and DMCI holdings.

Beltran said that the MWSS and the Maynilad should be strongly chided for even making such a proposal that the the government be a guarantor. "After the MWSS was sold in 1998, the proponents of privatization and the management of the MWSS were arrogant in proclaiming the virtues of privatization, even going so far as to say that water services will becoming more efficient and affordable for t he public. Now, less than a decade later, it's become obvious that privatization has only downgraded services - - the public's welfare and need for safe, potable, accessible and affordable water has been sacrificed at the altar of Maynilad's greed for higher profit."

Finally, Beltran said that securing another loan from the WB means bigger debts for the country. "Inevitably, the WB will impose humongous interest rates on the loan, and the Filipino people will again be made to shoulder the ever-ballooning foreign debt." #


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