The planned 36% increase in the all-in tariff of Maynilad Water Services Inc., in the Philippines, is criticized by the Water for the People Network.

Maynilad is one of the two private concessionaires that took over the operations of the Metropolitan Waterworks and Sewerage System (MWSS) when it was privatized in 1997. It serves the west zone while Manila Water serves the east zone. In December 2002, Maynilad filed a notice of early termination of its contract with MWSS after the latter refused to grant the rate increase Maynilad wants. An international arbitration panel was convened to resolve the dispute and in November 2003, it concluded that there is no basis to terminate the MWSS-Maynilad contract. The panel ordered both parties to continue fulfilling their obligations and allowed MWSS to draw from the $120-million performance bond of Maynilad, guaranteed by a consortium of local and foreign banks, to cover for the unpaid concession fees of the private concessionaire. When Maynilad took over, it agreed to shoulder 90% of the debts of MWSS through payments of concession fees. But it stopped paying such fees in March 2001 citing company losses. To prevent MWSS from drawing from the performance bond, Maynilad filed a petition for rehabilitation at Branch 90 of the Quezon City RegionalTrial Court. In March 2004, the Department of Justice (DOJ) facilitated the controversial Amendment No. 2 wherein MWSS would assume the debts of Maynilad in exchange for a 61% equity and drawing of $50 million from the bond. The National Economic Development Authority (NEDA) turned down Amendment No. 2 after strong public protests. Maynilad drafted a new rehabilitation plan and submitted it to Branch 90 on September 9, 2004.

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