Consumer group lauds Duterte stance vs MW, Maynilad

President Rodrigo Duterte is on the right track protecting Filipino consumers when he decided to shorten the government’s concession agreements with Manila Water Company Inc. and Maynilad Water Services Inc.

This was according to Laban Konsumer Inc. (LKI) president Attorney Vic Dimagiba, who stressed that Duterte’s intervention revoking the extension of the concession agreements will benefit consumers.

“The President is doing the right thing because he has to step up since our regulators are not pro-consumers in the performance of their job,” Dimagiba told Daily Tribune in an interview on Monday.

”(The regulators) are lacking in terms of transparency and full disclosure in the performance of their duties. This year the regulators failed in this performance criteria,” Dimagiba noted.

Dimagiba was apparently referring to the state-run Metropolitan Waterworks and Sewerage System (MWSS) which serves as regulator of the water companies.

He also explained that the revocation of the extension of the concession agreements will not have an ounce of impact on the consumers.

“The tariff rate had been approved until 2022. So, no impact to the consumers on the tariff when the contract expires in 2022,” Dimagiba said.

However, he said the government should quickly settle the new water concession agreement before the legal debacle affects consumers.

“(The government) has two options that they need to seriously consider now. Either the government takes over or assign the contract to a well-qualified entity on a competitive selection process as in power supply agreements,” Dimagiba said.

Earlier, Duterte threatened to have the military take over the operations of the water companies if no agreement is reached.

If the government can fix the concession agreements and repeal all the onerous provisions in the contract, Dimagiba said consumers may end up with lower water rates.

“The term of the contract can be included as one of those matters that are to be discussed amongst the new parties that the government will choose,” he added.

The 25-year water deals, approved during the administration of former President Fidel V. Ramos, would lapse in 2022 but were extended up to 2037 during the term of President Gloria Macapagal Arroyo in 2009.

However, in a recent hearing at the House of Representatives, the MWSS revealed that the agency revoked a board resolution extending the contracts for another 15 years.

Malacañang on Monday advised Vice President Leni Robredo to stay away from issue, like the one involving water companies, which she has no knowledge of.

On Sunday, Robredo called for a careful review of the government’s concession agreements with Maynilad and Manila Water to prevent “collateral damage” to the economy.

The Vice President said on her radio program that foreign investors may be discouraged to invest if there is no certainty in the contracts.

“Maybe, our advice to VP Leni –don’t get into things you don’t know…I don’t think she knows anything about it,” said Chief Presidential Legal Counsel Salvador Panelo during a briefing.

Duterte has publicly protested a liability clause in the concession agreements that holds the government liable if it interferes with the implementation of water rates and accountable to indemnify the companies for losses incurred.

The Permanent Court of Arbitration in Singapore has ordered the Philippine government to pay Maynilad around P3.4 billion and Manila Water P7.39 billion as compensation for losses or damages as spelled out under the liability clause.

But the companies said they were no longer pursuing the awards and that they will coordinate with the government to review provisions in the agreements that the state considered as onerous and disadvantageous to its interests and the consumers.

“The President has made a stand and the stand appears to be very effective. She (Robredo) should know that,” Panelo said.

Panelo also said that the President is serious with his pronouncement for the military to take over the operations.

“Why not? All the military has to do pursuant to the constitutional provision the government can take over public utilities is to maintain the same personnel,” Panelo said

“The military is just there guarding. That’s constitutional,” he added.

Meanwhile, Justice Secretary Menardo Guevarra, who led the review of the agreements, bared that a team from the Department of Justice was already activated to craft a new concession agreement.

“Yes, there is a team, the team will surely consider the issue of passing on the Corporate Income Tax to the consumers,” said Guevarra.

Guevarra hinted that the issue would be tackled in the next Cabinet meeting in January. (With Francis T. Wakefield and Alvin Murcia)