MANILA, Philippines — A partylist lawmaker has formally petitioned the Commission on Audit (COA) to stop the Metropolitan Waterworks and Sewerage System (MWSS) and its two water concessionaires from increasing water rates this year, saying that lack of public hearing makes the increase “unfair and unlawful.”

Bagong Henerasyon partylist Rep. Bernadette Herrera-Dy aired her appeal in a letter sent to CoA Chairperson Ma. Gracia Pulido Tan and key officials of the audit agency before Christmas last month.

In her request, Herrera-Dy stressed that the issuance of a status quo (ante) order against the water distributors will force them to cease and desist from increasing water rates.

The party-list solon has been contesting the rate adjustments which are set to be implemented starting this month despite the absence of a public hearing.

If water service cost increases have already been imposed, Herrera-Dy said the CoA must “restore and maintain the situation prior to such rate hike.”

“A status quo or status quo ante order may be issued by the Chairperson of the Honorable Commission, because such order is incidental to or a necessary power to the constitutionally reposed omnibus audit powers of the CoA,” she pointed out.

In response to Herrera-Dy’s appeal last September, the state audit agency has initiated an omnibus audit of the water concession system being carried out by the MWSS, the MWSS-Regulatory Office and the two private concessionaires – Maynilad Water Services, Inc. (MWSI) and the Manila Water Company (MWC).

Herrera-Dy said subject of the call for omnibus audit are the serious irregularities in the implementation of the concession agreement between MWSS and the two private water firms that have led to the imposition of excessive water rates and “illegal, excessive, extravagant” public expenditures and use of government property.

Acting with dispatch, Pulido Tan referred Herrera-Dy’s request to CoA Commissioner Heidi L. Mendoza who assigned the case to Directors Divinia M. Alagon and Leonor D. Boado.

Shortly after MWSI and MWC announced on December their planned adjustment of water rates, Herrera-Dy sent the urgent letter request for a status quo ante order, saying that CoA has the power to issue such directive which is “incidental to or a necessary power to the constitutionally reposed omnibus audit powers” of the agency.

“In the exercise of its constitutionally reposed quasi-judicial powers and omnibus auditing powers, the Honorable Commission may issue a status quo or status quo ante order ex parte, requiring no prior hearing and notice pursuant to administrative due process doctrine and case law,” the former Quezon City councilor noted.

Herrera-Dy stressed that CoA will be advancing government interest at the same time that it protects public interest if it stops the two firms from imposing new water rates without conducting public hearings.

She cited the Administrative Code of 1987 that requires “in no uncertain terms” public participation in the fixing of rates.

The provisions of the Code apply to MWSS and its own concessionaire system, including the two water firms.

“Supreme Court decisions consistently hold that prior notice and hearing are necessary before any rate hike or fee imposition, pursuant to the public participation provisions of the Administrative Code, otherwise the rate hike, charges or fees will be void,” the administration lawmaker said.

In her appeal for omnibus audit, Herrera Dy called the CoA’s attention to the following:

• MWSS’ bases and approval for the tariff adjustments in favor of the MWSS concessionaires are illegal, irregular, excessive, or unconscionable, or is grossly disadvantageous to the public-at-large;

• Conflicts of interest in the MWSS concessionaire system exist for the reason that there are interlocking directors and executive officers between and among the MWSS, the concessionaires and their successors-in-interest, which conflict of interest resulted to the irregular and unconscionable transactions;

• MWSS’ conversion and subdivision into housing of portions of the Balara and La Mesa Dam, which conversion favored certain employees and officers of MWSS and other agencies of government collaborating with MWSS, only by mere MWSS Board fiat, are irregular, or are grossly disadvantageous to the government and to the public-at-large, within the meaning of existing laws, rules and regulations, including the recent passage of the GOCC Governance Act of 2011 and Anti-Graft and Corruption laws;

• The two concessionaires are in default in the payment of concession fees;

• The outright substitution of parties, after clear and material default of service obligations, are irregular and are grossly disadvantageous to the government and to the public-at-large, within the meaning of existing laws, rules and regulations;

• MWSS’ extension of the Concessionaire Agreements for another 15 years long before the expiration of their original term in 2022, is illegal, irregular, unnecessary, or excessive, or is grossly disadvantageous to the government and the public-at-large

• The loans and funding for projects of the MWSS, acting on its own, or through the concessionaires and other agents, are illegal, irregular, unnecessary, or excessive, or are grossly disadvantageous to the government and the public-at-large.