Water firms get ultimatum

The DoJ, Office of the Solicitor General, Department of Finance and many other agencies have drawn up a number of steps to address this problem.

The Palace is gung-ho about filing charges against officials of water concessionaires Maynilad Water Services Inc. and Manila Water Co. Inc. if provisions in their contracts that are disadvantageous to government remain, presidential spokesman and chief legal counsel Salvador Panelo said yesterday.

In a radio interview, Panelo said it would be up to the Department of Justice (DoJ) to pinpoint to the water concessionaires the provisions in the contracts that are considered onerous and should be removed.

DoJ spokesman Undersecretary Markk Perete said legal steps will be resorted to if “illegal” and “onerous” provisions in the concession agreements are not revised or removed.

In a television interview, Perete said officials of the water firms have agreed to sit down and discuss with government the provisions in the contracts that the President considered onerous.

“The DoJ, Office of the Solicitor General, Department of Finance and many other agencies have drawn up a number of steps to address this problem,” he said.

“If negotiations fail, the government is also ready with measures in court or outside the court,” he added.

An international tribunal based in Singapore recently ordered the Philippine government to pay Maynilad Water Services Inc. P3.424 billion in revenue losses from unimplemented rate adjustments.

The Chief Executive on Thursday continued his criticism of the concession agreements that the government entered with Maynilad and Manila Water during the administration of former President Fidel V. Ramos.

The President assailed the arbitration rulings and said the government would not pay P11 billion in total claims from both concessionaires.

Justice Secretary Menardo Guevarra said the onerous provisions were the reasons why the government was ordered to compensate the water firms. The President maintained that the people behind the contracts should be held liable for economic sabotage.

Perete on Sunday said that according to DoJ evaluation, such a provision contravenes Republic Act 6234, or the law that created the Metropolitan Waterworks and Sewerage System. It stated that only the MWSS board of trustees can set water rates.

At the same time, only the National Water Resources Board can determine whether the water rates that the MWSS has set were reasonable.

The possible filing of charges, including economic sabotage, is still subject to DoJ study.

“Not yet, that’s still being studied by the DoJ,” Panelo said.

When asked if the Duterte administration is willing to settle with the water concessionaires, Panelo said everything should be threshed out first.

Sen. Christopher Lawrence “Bong” Go asked the water companies to fulfill their obligations fairly and stop passing the cost in solving the problems to consumers.

In a statement, Go said Maynilad and Manila Water should follow what is stipulated in their contracts with government.

“The Filipinos are carrying the burden. We are facing problems in our water supply in Manila yet they add to the burden of the consumers. Filipinos own the water they distribute. It’s just that they are the ones who won the service contract. That contract should be fair to each Filipino,” Go said in Filipino.

“It should be fixed first. The government and the private contractors will talk. The two will have negotiations. They will be discussing terms on how they will fix what the President was reacting to,” Panelo said.

On the comments made by San Beda Graduate School of Law Dean Fr. Ranhilio Ronquillo that President Duterte has basis to rescind the agreement but cannot do so arbitrarily and that the cancellation of the contracts should undergo court process, Panelo clarified that the Chief Executive didn’t say anything about rescinding it arbitrarily.

“What was said was for them to fix the contract because it is wrong. There should be talks. If they agree, there’s no problem. If not, then a case should be filed,” Panelo said.

On the matter concerning the appeal made by the Metropolitan Waterworks Sewerage System for both Maynilad and Manila Water to defer their respective water rate increases by 1 January, Panelo said everything is possible.

“There should he talks, defer the rate increases if they are not ready to implement these,” he added.

Panelo previously stated that government will not pay Maynilad and Manila Water despite an order from a Singapore-based arbitration court to pay the two water concessionaires P3.6 billion and, P7.4 billion, respectively, as compensation for losses or damages.

He made the remark after the Chief Executive expressed outrage over the decision of the Permanent Court of Arbitration in Singapore, which directs the government of the Philippines to pay Manila Water billions of pesos for suspending water rate increases that occurred prior to his assumption to the presidency.

In an interview over radio station DZXL, Panelo said the President’s order is not to pay it due to the fact that the contracts entered into by the government with the water concessionaires were “onerous.”

He added that the President is also reviewing other contracts that might have been disadvantageous with government.

“Many, every contract which involve public service he will look at it,” he said.

Panelo added one of the provisions that the DoJ saw as disadvantageous to the government is that if the water concessionaires went bankrupt or loses money, it is stated that government will pay them.