SKIMMING LOTTO BETS: Reader Bobby Gochangco wants the identity of the Sweepstakes official who said there are 10 million bettors in every Lotto draw “not only for his mathematical stupidity but for something else that more than meets the eye.” We refer him to the front page of the STAR issue of last Saturday (Dec. 28).

Gochangco said: “If there are 10 million bettors at one bet of P10 each, the jackpot should move up by P100 million less taxes and expenses or by a very sizable amount, not the P5 million or so every draw. But some bettors place more than one bet, thereby further increasing the pot.”

He added: “It could be possible that there are really 10 million bettors, but the management of Lotto is not giving us the correct figures and they must be skimming from the top. Should we trust those Malaysians?”

The SuperLotto jackpot in last Sunday’s draw was around P92 million. Nobody got it. For the next draw on Thursday, the new jackpot is estimated to pass P100 million. Why only an increase of about P10 million when the draw brings in at least P100 million? Is anybody looking into this?

The official said the chances of winning the jackpot are one in 10 million because there are 10 million bettors. Obviously he does not know his math. The Lotto odds are not determined by the number of bettors, who do not play against one another, but by the number of numbers being used (49) and the number of numbers needed to form a winning combination (6).

Based on that, the chances of a six-number combination winning the jackpot is one out of 13,983,816 — not one in 10 million as estimated by the Sweepstakes official.

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WATER RATES TO GO UP: In a few days into the new year, the Metropolitan Manila Waterworks and Sewerage System plans to raise the water rate in the metropolis from P19.95 per cubic meter to P26.75 pcm to help rescue Maynilad Water, the private concessionaire in the West sector of the franchise area.

The rescue attempt, however, is two years late. Maynilad is not drowning. It has drowned already and only quick and competent resuscitation can restore it to life.

The rescue efforts also appear misplaced. Maynilad has not been asking for a rate increase, which MWSS apparently has mistaken as the root of its financial troubles.

The big torpedo that downed Maynilad was not the socialized water rates but the disastrous drop in the value of the peso in relation to the US dollar in which major loans of MWSS are denominated.

Had it been authorized to cope automatically with the peso-dollar rate fluctuations, Maynilad would have weathered the financial storm and not have served last Dec. 9 a notice of termination returning its concession to MWSS.

The termination takes effect in 60 days — that’s on Feb. 8, 2003 — unless contested by MWSS.

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SOS SIGNALS IGNORED: Two years ago, Maynilad was already crying for help as it tried to keep afloat. It begged the MWSS for “most urgent attention” to crucial matters affecting its liquidity. Under the concession agreement, the MWSS has specific obligations to ensure the viability of Maynilad.

The concessionaire’s SOS was sent to MWSS Administrator Jose Mabanta in two memos dated Sept. 20 and Oct. 16, 2000.

Recall that among the obligations that Maynilad assumed under the agreement was the payment of 90 percent of MWSS concession loans amounting to some $800 million.

(The remaining 10 percent of the dollar-denominated loans went to Manila Water of the Ayala group that was awarded the other franchise for the East sector.)

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LOAN VALUE DOUBLES: At the time (August 1997), the peso was around P26.50 against the US dollar. In September-October 2002 when Maynilad begged for MWSS’ help, the exchange rate was already P48.50 to $ 1.

Today it is more than P53 to the dollar, or double the rate prevailing when Maynilad assumed the dollar loans of MWSS.

When the concession was awarded in August 1997, the economic managers assumed that the peso would depreciate by around 3-percent annually. As things turned out, however, the September-October 2000 exchange rate was something like 83 percent higher than the exchange rate in August 1997.

Since it assumed dollar loans of the MWSS in August 1997 until October 2000, Maynilad has paid P6.5-billion, which is P2 billion more than the original projection based on a 3-percent yearly depreciation of the peso.

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NO CERA FOR MAYNILAD: In its twin memos, Maynilad appealed for “immediate regulatory relief” specifically for the adoption of an automatic CERA (currency exchange rate adjustment) mechanism to deal with currency fluctuations.

It mentioned that automatic CERA has been accorded other utility firms such as the Philippine Long Distance Telephone Co. and the Manila Electric Co. (Meralco).

Maynilad also asked MWSS to live up to its performance obligations, specifically on infrastructure commitments and the setting in place of regulatory relief for industry problems.

Relevant or not, a chain of major political events took place in the meantime — the 1998 presidential elections, the Estrada impeachment, and EDSA Dos.

To make matters worse for Maynilad, MWSS apparently took the company’s warning of impending collapse (should the help it seeks be denied) as a threat, blackmail even.

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TWO YEARS TOO LATE: In its business plan submitted to the MWSS Regulatory Office last October, Maynilad did not ask for a rate increase. What it asked for was a restructuring of the payments of concession fees, which it has been asking for from way back.

For all the efforts — feigned or sincere — now being exerted by MWSS to save the concession, it is too late in the day to rescue Maynilad.

As Maynilad president Rafael Alunan said when he waved the white flag, “The period within which to resolve Maynilad’s extraordinary problems is now a thing of the past… the end of the concession now lies ahead of us.”

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PIATCO DESPERATE?: If its self-serving press releases are any indication, the Philippine International Air Terminals Corp. (Piatco), contractor for Naia-3 (Terminal 3 of the Ninoy Aquino International Airport), must be getting desperate.

A recent Piatco statement claimed that international air experts had confirmed that Naia-3 was ready to operate as early as last October.

The Piatco cited part of a report of an IATA mission that inspected Naia 3: “The tour of T3 (Terminal 3) showed that the terminal is almost complete and ready for airline and government agency fit-out as well as fit-out of the retail concessions. The airlines are not concerned that the T3 will not be ready for a successful opening.”

But members of the Board of Airline Representatives continue to clarify reports on the transfer of major airlines to the new terminal.

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AIRLINES CLARIFY STAND: While airlines confirmed that most of them have signed an agreement with Piatco on the lease of office and lounge spaces, they cited “unresolved issues such as the delayed construction of the access road from T2 to T3 and support facilities like banks, restaurants and other shops.”

They said that “none of us can possibly start regular and normal operations on the appointed opening date (referring to Dec. 16, 2002).”

They added that for passenger safety and convenience, “we can only transfer to this world-class facility once the government has issued the required certification that T3 is ready for commercial operations.”

The lack of a connecting route had been referred to as among Piatco’s violations of its contract with the government which had been declared null and void by President Gloria Macapagal-Arroyo.

That link is just one of the many requirements of Naia-3 awaiting proper installation. Without such essential features, it would have been a disaster had the new terminal been opened last Dec. 16.