Sept. 24 (Bloomberg) -- Manila Water Co., the largest publicly traded water company in the Philippines, filed a dispute notice with the International Chamber of Commerce questioning a regulatory order to cut tariffs.
The notice starts the arbitration process with the Metropolitan Waterworks & Sewerage System to resolve disagreements under their concession agreement, the company that provides half of Manila’s water supplies said today in a stock exchange filing.
“Until the appeals panel arrives at a final decision on the tariff determination, existing water rates shall remain in effect,” the Ayala Corp. unit said.
The regulator ordered Manila Water on Sept. 12 to cut its basic water charge by 29 percent after some lawmakers pledged to investigate about 15 billion pesos ($345 million) in income taxes and expenses that water utilities passed on to consumers. The order will “severely compromise and impair” Manila Water’s ability to serve customers, the utility said today.
Manila Water closed down 0.5 percent to 27.90 pesos today, bringing the stock’s decline this year to almost 13 percent.
A panel will be appointed and conduct proceedings according to arbitration rules of the United Nations Commission on International Trade Law, the company said. Manila Water and the regulator will appoint one member each to the panel that will be headed by an appointee of the International Chamber of Commerce president.
The water regulator had also ordered the other concessionaire, Maynilad Water Services Inc., to cut its tariff 4.8 percent. The water companies said raising tariffs will help fund as much as 1.1 trillion pesos in investments until 2037.
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