Maynilad is putting up an arbitration case against the Metropolitan Waterworks and Sewerage System for breach of contract.

?We have a legal remedy [but] we hope we will not get as far as that legal remedy. We will try to get to the process of arbitration,? Maynilad president Rogelio Singson told reporters in a press briefing yesterday.

He said the water regulatory agency has violated the concession agreement between the government and its private concessionaires.

Singson said a petition would be filed within the next few days.

Maynilad is set to implement a rate adjustment starting next month following its completion of the re-basing scheme on Jan. 1.

The adjustment on Maynilad rates was borne out of a rate re-basing prescribed by regulators over a five-year period to review its spending program and the needed tariff adjustments.

But the water regulatory board passed a decision Thursday to disallow any water rate increase this year.

MWSS administrator Diosdado Jose Allado said the rate adjustment of the two concessionaires was ?not authorized.?

As a result, Maynilad said it might have to reduce capital expenditure to P5 billion from P8 million this year.

?We appeal to the MWSS to be more considerate so that Maynilad will be viable. We want to serve our nine million customers. We will not be able to do this if we are not allowed a tariff adjustment,? Singson said.

He added that a cut-back on the investment would delay expansion plans to bring piped water to its remaining three million customers.

For low-income clients, it is proposing P1.13 per cubic meter along with P4.71 per cubic meter adjustment for mid-range consumers, comprising 64 percent of the concession area.

Manila Water communications specialist Ranulfo Habaluyas said the company was deferring any statement until MWSS makes an official announcement.

?They should make it official first, then we?ll react,? he said. Othel V. Campos