by LUZ RIMBAN

MOST PEOPLE think that the biggest water thieves are squatter communities often pictured in broadcast and newspaper reports as stealing water through illegal connections.

They are not. The biggest water pilferers are large commercial, industrial and residential users that consume huge volumes of water daily, among them some big corporations, malls, hotels, motels, condominium owners, and real estate developers.

A culture of corruption in what used to be Metro Manila’s sole water utility firm—the Metropolitan Waterworks and Sewerage System (MWSS)— abetted this big-time water thievery. Corruption in local bureaucracies condoned it.

Today, two-and-a-half years since the privatization of the MWSS—the largest water privatization project in the world—this very culture of corruption is preventing the two new water concessionaires, Maynilad Water Service and Manila Water Company, from solving the problem.

Among the big corporations where Maynilad has found illegal water connections are Coca-Cola Bottling Company, Unilever Philippines, and Merville Park Subdivision in Paranaque. Manila Water’s records yield such names as Loyola Grand Villas and the San Juan Slaughterhouse.

Maynilad and Manila Water, and before them the MWSS, have been losing billions of pesos each year to these big water pilferers. Coca-Cola’s arrears arising from a discovered illegal connection believed to have been installed in its Pandacan bottling facility in 1984 amounted to P27 million. Unilever’s unpaid accounts were assessed at P19 million, Merville Park at P18 million.

Unilever and Coca-Cola admit to the discovery, near or within their premises, of illegal connections. But officials deny their corporations used illegally drawn water. These connections, they say, have either been plugged long before their time or were never in use. Still, Republic Act 8041 states that the existence of illegal connections constitutes prima facie evidence of water pilferage. The cases are being settled amicably.

Manila Water has so far filed cases against four customers for violation of Republic Act 8041—which penalizes water pilferage—one of them the San Juan Slaughterhouse whose arrears are estimated at P3 million.

Documents also show a dispute between the concessionaire and V.V. Soliven, developer of Loyola Grand Villas. Water had to be cut off from portions of the exclusive village after V.V. Soliven failed to pay debts of over P600, 000 arising from an illegal connection.

But it is not only the two concessionaires who lose out from water pilferage. Small, law-abiding water customers also bear the brunt of water theft. Thieves puncture water lines that result in the contamination of the water supply.

Water pressure drops in places where thieves divert water supply for their own use. Among these thieves are water sellers, some of whom go as far as turning off water valves that result in no-water situations in some areas. Consequently, ordinary consumers are forced to buy water from these water sellers for as high as 13 times the amount that both concessionaires charge.

And because the concessionaires are losing revenue, they would have to seek price adjustments to recover losses, resulting in ordinary consumers paying the price for other users’ misdeeds.

“We must change the perception that it is the poor people who do this (steal water),” says Yves Bories, a French water utilities expert and vice-chairman of Maynilad’s management committee.

Unfortunately, Maynilad and Manila Water have themselves to blame for such a perception. Most of their publicized raids against water thieves have been directed at squatter communities in Metro Manila, which have been easy targets of the two concessionaires’ campaign against water theft.

True, the number of illegal connections in these communities is high, but the total volume of water they steal is low. It is the thieves among the big entities—those that illegally siphon off huge volumes of water from both concessionaires—which are actually causing them enormous losses.

The registered big water users account for a huge chunk of the concessionaires’ incomes. They are those classified as Large Meter Accounts. These include condominiums and subdivisions that consume huge volumes of water and are billed rates for residential users. Then there are industrial and commercial customers, which are charged higher rates.

Maynilad’s Large Meter Accounts comprise only 0.5 percent of its customer base, while its industrial and commercial customers make up around six percent of its total of nearly 500,000 customers. Combined, they contribute some 32 percent to the company’s income.

At Manila Water, the combined Large Meter Accounts and industrial and commercial users are likewise estimated to be less than 10 percent of its 300,000 or so customers, but they contribute 40 percent of the company’s collections.

Not surprisingly, both Maynilad and Manila Water have hesitated to use the full force of R.A. 8041 against those among their big customers who violate it. “They are good customers and we are not here to prosecute them but to settle with them,” said Maynilad corporate communications director Bertrand Pesayco. In recent months, spiraling losses have forced the firm to take a more aggressive stance against water thieves.

“We discourage the filing of cases,” says Manila Water staff lawyer Jovencio Fulgeras. The objective, he says, is not to send big water thieves to jail but to make them pay for what they stole.

When Manila Water, a consortium operated by Ayala Corporation and British-American International Water Ltd, won the concession to take over Metro Manila’s east zone in August 1997, it discovered 11,000 illegal connections in its service area. But thousands more were surfacing every quarter.

Maynilad, owned jointly by Benpres Holdings and the French Suez Lyonnaise des Eaux, disconnected 700 large and small illegal connections in December 1999 alone. It is harder hit by the problem. Maynilad handles the west zone, the bigger and older section of MWSS’s water service area.

It is in the west zone where the MWSS, first known as Carriedo Waterworks, then the National Water and Sewerage Authority (NAWASA), began operations 120 years ago. An aging pipe network and a huge customer population have contributed to higher incidences of thefts and leakage.

“There are a lot of illegal connections turning up everyday. The more you look, the more you find,” Bories reveals.

But in search of the roots of this problem, the water concessionaires will have to point the finger at themselves. Most of the employees of both Maynilad and Manila Water are former personnel of the MWSS, a government corporation riddled with corruption, where it was common knowledge that illegal connections could be had for a price and officials could be bribed to ignore such offenses.

The other side of the problem is corruption in the bureaucracy whose cooperation is essential in providing water service connections to customers, and in rehabilitative measures such as repairs of leaks and detection of illegal connections which are mostly found underground.

Excavation permits issued from barangay level up to local government units, traffic enforcement units and even the Department of Public Works and Highways are necessary before any digging—whether for water service connection, detection of illegal connections or leak repair—can be done.

Florencio Cayco, executive assistant to Maynilad president Rafael Alunan says excavation permits are easy to get if one pays or bribes his way through. The bribe amount varies depending on the type of road to be excavated—whether barangay roads, municipal roads or national roads.

If the excavation is to be done on busy streets, a permit has to be secured from traffic enforcement offices. Even in small barangay roads, which Cayco says present the least problems, barangay officials ask for “donations” before allowing engineers to excavate.

In some cities and municipalities, the processing of excavation permits are centralized in the mayor’s office, contributing to long delays which force potential water customers to resort to quick, but illegal, water connections.

“In Makati,” wrote Cristina David and Arlene Inocencio in a paper for the Philippine Institute for Development Studies in 1996, “it is common knowledge that such connections can be obtained for cost of about P25,000 in contrast to P2,300 for a legal connection.”

Admittedly, the bureaucratic requirements for water service connections have left many potential water customers with no other recourse but illegal connections. Apart from the excavation permit for which an applicant must shoulder a fee of as much as P4,000, the applicant must also present proof that he or she owns the property where the connection is to be made.

Before the MWSS privatization, impoverished families who squatted on other people’s properties were automatically disqualified from MWSS service. As a result, the most number of illegal connections is found in squatter communities.

With privatization came remedies that included changes in the requirements for water service connections. Squatter families now need only to present barangay clearances to secure legal water connections. Both Maynilad and Manila Water have also provided public faucets to contain water theft in blighted communities.

“Whilst the highest number of illegal connections are within depressed areas, we are having good success in identifying these through our Barangay Sweep Program. We have given depressed communities an opportunity to register as new connections and pay their arrears since August 1997,” says Manila Water corporate communications chief Joel Lacsamana.

Identifying illegal connections in these depressed communities has been easy. But doing so among the big water users has been a perennial problem. “Malalaking kumpanya yan so basically, mayroon yang paraan maitago, kasi nga malaki. At hindi mo basta-basta mapapasok. Alangan naman papasukin ka alam nilang nagnanakaw sila ng tubig,(They are big companies so they have ways of hiding it. And you cannot just go in. They wouldn’t let you in because they know they are stealing water),” says former MWSS administrator Angel Lazaro III, who presided over the MWSS for two years at the time the government was preparing to privatize the water utility.

“We are in a difficult position,” says Engr. Nestor Gabot of the now-decentralized Task Force on Illegal Connections at Manila Water. Thieves, he says, will always find ways to outwit the water concessionaires, who often learn of illegal connections through tips either from within the concessionaire or the erring establishment. But by the time his group obtains the necessary permits, Gabot laments, the suspected water thieves would have done away with the evidence.

Engineers investigating illegal connections and leaks verify tips with sonar or sound devices meant to detect such underground problems. Cayco says it is difficult to use these devices during the day when traffic and noise are heavy. They usually wait till late evening or early morning when there is minimal traffic on the road. This contributes to delays that allow suspects time to dispose of evidence.