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Water concession deal changes up

There are certain provisions which, I believe are non-negotiable.



The government review panel and Maynilad are likely to meet today (Monday) with Maynilad Water Services Inc. (MWSI) to discuss changes in the water concession agreement.

Justice Secretary Menardo Guevarra on Sunday said the review panel has already sent a copy of their newly-signed water concession deal with Manila Water Company Inc. (MWCI) to be assessed by the officials of the MWSI.

“The meeting will push through tomorrow until we hear the initial comments of Maynilad, we can’t say if we’ll have a concession agreement that is not too different from the concession agreement with Manila Water,” he said.

He stressed that certain provisions that are in the revised concession agreement with Manila Water would certainly be part also of the agreement with Maynilad.

“There are certain provisions which, I believe are non-negotiable. The removal of the non-interference clause, the non-chargeability of corporate income tax to consumers’ water bills, no government guarantees for future debts, Commission on Audit audit, and a more transparent governance mechanism are some of these,” Guevarra said.

The Justice chief, however, could not ascertain how long the negotiation for the new concession agreement with Maynilad would last but noted that they need to finish the discussions before the original water deal expires next year.

“The ball is in Maynilad’s court. Note that its original concession agreement will expire in 2022,” Guevarra earlier said.

In 2019, President Duterte ordered the Justice department to review the concession agreements with MWCI and MWSI after discovering onerous provisions in the existing contracts, and after Singapore issued a decision stating the Philippine government should pay P7.4 billion to Manila Water and P3.4 billion to Maynilad for the losses they suffered from an unenforced water rate hike.

Last March, the government through the Metropolitan Waterworks and Sewerage System and Manila Water signed a new concession agreement which is expected to pave the way for “better overall service and more reasonable charges to consumers.”

Guevarra, however, could not say if the government would no longer pursue criminal action against the executives of water concessionaires Manila Water and MWSI and government officials behind the onerous 1997 contracts.

He said the new agreement is a lot more equitable than the original one, but he can’t say with any certainty if the government will still pursue any legal action arising from the old agreement, as there are many factors to consider.