The two water companies benefited from the onerous contracts they entered into with the state-run Metropolitan Waterworks and Sewerage System in 1997.

Water concessionaires Manila Water Company Inc. and Maynilad Water Services Inc. have “profited so much” from their contracts with the government that the private firms’ claims of losses is mere frivolity.

Thus, said Chief Presidential Legal Counsel and spokesman Salvador Panelo on Tuesday — stressing the two water companies benefited from the onerous contracts they entered into with the state-run Metropolitan Waterworks and Sewerage System (MWSS) in 1997.

“I do not think the concessionaires lost from the business venture,” Panelo told reporters.

“They have profited so much out of this concession agreement which is precisely the reason why government is complaining because of the onerous provisions. They did not file income tax. They were in control of the rates so how can you say that they lost?” he added.

In a disclosure on Monday to the Philippine Stock Exchange, Maynilad stated that while it can finance its current projects, the shortening of the concession term prevents it from commencing with new projects to improve the system, as the banks have suspended lending money to the Manny V. Pangilinan-controlled company.

Panelo, however, maintained that the concession agreements will expire in 2022 as originally entered into by MWSS and following the state-run regulator’s revocation of the contract extension signed in 2009.

“The issue was it was extended prior to its maturity, right? And according to MWSS they revoked the extension so it means that the original expiration would now be applied,” Panelo said.

In 1997, MWSS signed the 25-year concession agreements with Manila Water and Maynilad. However, the agreements were given 15-year extension or up to 2037 during the time of former President Gloria Macapagal-Arroyo in 2009. Panelo said after 2022, there will be a new contract.

“The original concessionaires could be the same people running it or if there are better proposals, there would be bidding of course,” he said.

Meanwhile, Panelo said he has yet to ask President Rodrigo Duterte whether he is still interested in meeting with executives of the MWSS, Maynilad and Manila Water owned by the Ayalas.

“That particular matter I have to ask the President. With regards to his last comment, I suppose if that was his last statement, then we have to abide by it unless he would change his mind,” Panelo said.

“Well as far as the President is concerned these onerous provisions must go,” he added.

Meanwhile, Finance Secretary Carlos Dominguez downplayed the negative impact on investor confidence of the ongoing scrutiny of the contracts of the two water concessionaires.

Dominguez said that the review should not be an issue, especially to other investors whose contracts are properly crafted and without onerous terms.

The finance chief said he is confident that potential investors will not be turned off as he pointed out that the two water concessionaires “have themselves said that they are willing to do the review.”

“In fact, let me tell you, just to show you that this review is acceptable: when we bid out the contract for the water concession in New Clark City, these onerous terms were not there. And yet, Manila Water bid, so it must be acceptable to them,” Dominguez said.