By Othel V. Campos

Manila Water Co., the water utility firm of conglomerate Ayala Corp. that owns the concession in the eastern section of Metro Manila, said it will cap rate increases to P1 per cubic meter a year from 2010 to 2012 if the government agrees to extend its contract by 15 years.

Manila Water said in a public hearing yesterday that an extended concession period to 2037 from 2022 will enable the company to increase investments to P450 billion from P187 billion and improve services.

?This petition to renew our concessionaire agreement is the only way we can effectively recover our investments if we are to frontload much of our projects by 2016 as demanded by Congress,? said company president Antonino Aquino during a public consultation at the Seameo Innotech Center in Diliman, Quezon City.

Lawmakers have asked Manila Water and DMCI-MPIC Water Co. Inc., owner of Metro Manila?s west concession, to complete their work as early as 2016 instead of finishing their commitments at the end of the concession period, or in 2022.

Aquino said Manila Water needed to get assurance from regulator Metropolitan Waterworks and Sewerage System about the proposed extension as early as next quarter.

?We hope that this will happen within the next quarter because it is very important for us to have a good indication that we can be financially viable,? he said.

He said an extended concession period would allow Manila Water to recoup its investments and the government to increase its income by P96 billion while providing world-classs service to consumers.

?It will also mitigate the impact of the global economic crises to the economy through increased investments and job creation,? added Aquino.

He said extension proposal would effectively lower water rate increases by 66 percent over the next three years to P3 per cu. m. until 2012, or P1 starting in 2010 instead of the cumulative P8.75 per cu. m.