From the onerous IPP contracts spawned by Corazon Aquino’s self-inflicted power crisis, to those onerous water agreements and IPP contracts under the Ramos administration, to those signed and continued post crisis under Estrada, and then renewed under Arroyo and ignored or bungled under Aquino — all these Rodrigo Duterte has to clean up after.

Of the conglomerates that impact on the economy since we broke free from the dictatorship years and forged on presumably following the free enterprise model under a democracy as opposed to crony capitalism and authoritarianism inflicted on us, there are perhaps less than a handful operating under a congressional franchise system. They debunk the open competition inherent in free enterprise as the system allows specific monopolies granted through congress.

These major franchises lie in the utilities sector, notably in power and energy, and water supply and sewage. For water and sewage, in the Metropolitan Manila area the state through contracts has assigned two major concessionaires where we now have burning controversies.

Both franchise and concessionaire modes seek to imbue in public utilities a private component presumably because the private sector, compelled by profits, can be more cost effective, efficient and professional. It was also presumed that these would be politics-free. Presumably.

When we won our democracy back at EDSA, one of the first acts of Corazon Aquino was to junk the graft-ridden Bataan Nuclear Power (BNP) plant project which would have supplied the grid initially some 600 megawatts. Unfortunately as the economy grew rapidly the existing power generating facilities sans the BNP were sorely inadequate. This inadequacy created six to 12-hour power outages.

Like the water supply problems we experience today, we were arm-twisted into contracts with independent power producers (IPP) to quickly build mostly diesel and coal fueled power plants. We were desperate and were forced to sign contracts despite onerous provisions that guaranteed IPP handsome profits regardless of whether they provided the electricity they were contracted for or not.

In some instances, a power plant would not or could not operate due to either maintenance or cost constraints but would nevertheless be paid for electricity they did not generate. One IPP would even deliberately shut down and purchase off the grid and resell power in a captive market. In their power purchase agreements (PPA) was a “take-or-pay” proviso that guaranteed payment whether they generated power or not.

When the power situation had eventually stabilized during the latter term of Fidel Ramos and into the presidency of Joseph Estrada, these long term ‘take-or-pay” provisions continued despite the absence of a crisis to justify patently onerous terms.

This necessitated the crafting of reform statutes that likewise failed and thus perpetuated our notoriety as having one of the highest power rates in the region.

No one in the government side was ever held accountable. Same for those granted franchises and concessions.

This is the Philippines. As these companies necessarily go through a congressional gauntlet, then, as they pass through congressional vetting, a fair amount of politics invariably contaminates their franchise DNA.

As we scrutinize the water contracts we are reminded that the courts have previously ruled on the issue of pass on taxes. The question appears unresolved under the contracts of Manila Water and Maynilad. When they resort to passing on tax obligations to the public, then the public is doubly taxed. First by the water fees they pay and second, by shouldering income tax obligations.

These were negotiated under Fidel Ramos and were subsequently extended under Gloria Macapagal-Arroyo. Under Benigno Aquino III these contracts were being adjudicated under arbitration protocols due to disputes on the pricing of services and the contractual verbiage which insists that the government which owns the water resources and the House which simply franchises out its operations cannot interfere in such pricing.

See in this where money can be made, albeit extorted unconscionably. And it isn’t just the private entities involved. Note the complicit presidents. It is also the government counter parties in these contracts who must be held accountable.

From the onerous IPP contracts spawned by Corazon Aquino’s self-inflicted power crisis, to those onerous water agreements and IPP contracts under the Ramos administration, to those signed and continued post crisis under Estrada, and then renewed under Arroyo and ignored or bungled under Aquino — all these Rodrigo Duterte has to clean up after.

Fortunately Duterte is beholden to no one but the public, lest those onerous ab initio agreements perpetuate ad infinitum.