By: Antonio Contreras (www.manilatimes.net)
WE love to say that water is free. Thus, some would argue that those who profit from it are basically committing an ethical and moral sin.
Indeed, and ideally, water is a commodity that is produced by nature. Technically, water is produced by the natural processes inherent in the water cycle. Precipitation produces rain, snow or ice, which fall into rivers, lakes and oceans, and stored as groundwater in our aquifers, which eventually comes out in springs and creeks that would feed into rivers, lakes and oceans. These bodies of water then evaporate and form into clouds, which eventually become precipitation.
But we are not just talking here of water in general, but water fit for consumption not only by humans, but by plants and animals. And it is potable water that becomes a scarce commodity. Gone are the days when we could just go to the nearest spring, well or lake to get water for our domestic consumption. A growing population has made it necessary to install distribution systems that would draw water from natural sources such as deep wells and natural bodies of water, or rely on precipitation and impound this in human-made dams. There is also now a need to treat the water so that it is rendered fit for domestic and commercial use — from simple filtration and purification to desalination of salty water from the sea.
Compounding the problems of greatly reduced natural sources of water and accelerating treatment costs are the effects of the so-called effluents of affluence or the impact of wastes from domestic and industrial activities on the quality of water supply. Massive deforestation has greatly compromised the capacity of watersheds to hold water, and to regulate its quality and flow. This leads to the siltation of rivers, lakes and human-made dams, which further reduces not only the quality, but also the quantity of potable water. In addition, the development of built environments that led to the concretization and asphalting of land to build human habitats, highways and urban infrastructures caused a reduction of water seeping into aquifers and the increase of surface run-off. Lack of forest cover and too much infrastructure development also lead to a situation where monsoon rains bring destructive floods that bring a lot of water that is of poor quality, only to be followed by drought episodes. This is because there is very little ground water as well as water flowing from springs, wells and creeks. These are the result of large amounts of surface run-off where water from heavy precipitation directly flow into the lakes and seas and thus fail to adequately replenish the aquifers.
Thus, we are now confronted with the situation that water ends up being implicated in a complex supply and distribution problem. In order to address this, investments have to be made in infrastructure to impound, treat and distribute clean and potable water; there is also a need to manage the recycling, treatment and disposal of waste water and those polluted by toxic wastes. All of these activities would require high levels of capital expenditures.
Ideally, it is the responsibility of the state to invest in these kinds of activities, considering that water is a public good and even a human rights issue. Unfortunately, our history has shown that public institutions are not efficient and have dismally failed in so many instances. Before 1997, the state had full control over water distribution. But the sheer weight of government inefficiency led President Fidel Ramos to move for the privatization of water distribution. The conventional wisdom at the time was that private entities, such as the big water concessionaires and the local water districts, because they are driven by market forces, would be more efficient.
The downside of this argument, however, is that private entities are also primarily driven by profit-seeking, hence would see water no longer as a public good, but as a commodity. They would weigh into their equations the cost of their investments in infrastructures and would expect to recover this from the revenues that they would be collecting from domestic, commercial and industrial consumers. Operating under the premise of a business, they would necessarily expect that they will profit from the undertaking. No sane private entity will invest in something where they would just break even. After all, they are not philanthropists but business corporations.
It is in this context where the allegedly onerous provisions in the contract, which the Philippine government, through the Metropolitan Waterworks and Sewerage System, entered into with Maynilad Water Services Inc. and Manila Water Co. Inc., emerged. Desperate to entice parties to invest in the distribution of water, at a time that the country was facing a water crisis, our government designed the contracts with provisions that may have appeared logical at the time, but would come back to haunt us.
It is easy to paint Maynilad and Manila Water as greedy companies owned by heartless oligarchs. But it is not the obligation of private companies to force themselves to operate at a loss. It is the job of government to ensure that these companies work for the public interest. Beyond the cursing and bravado, the Duterte administration is doing the right thing to pressure the concession owners, the Ayalas and Manuel Pangilinan, to renegotiate the terms of the government’s contracts with the Manila Water and Maynilad.
Part of the duty of government is to ensure that the water that is distributed is not dirtied not only by the effluents of affluence, but also by the greed of the affluent. And this could not just be solved by forcing Manila Water and Maynilad to exercise some social responsibility and moderate their greed. It would also involve ensuring that the operations of water districts all over the country do not fall into the monopolistic hands of other oligarchs who may be described as “good” but will be just as profit-seeking as any other oligarch.