Maynilad, Manila Water should agree to remove ‘onerous’ provisions: justice official

December 8, 2019

Manila Water Co. and Maynilad Water Services Inc. should agree to remove the supposedly disadvantageous provisions in the 1997 concession agreement, otherwise the government will be forced to take legal action, an official of the Department of Justice ( DOJ) said on Sunday.

Justice Undersecretary Markk Perete disclosed that Maynilad Water Services and Manila Water have agreed to discuss with the government.

"We hope it can be mutually agreed upon by the parties but otherwise the DOJ, OSG (Office of the Solicitor General), Department of Finance and many other agencies have drawn up a number of steps to take to address this problem," Perete said in an interview over GMA News TV.

Perete, who is also DOJ spokesperson, said whether the negotiations would result for concessionaires to agree on removing these provisions, the government has prepared several options to take both in and out of the court.

Last week, President Rodrigo Duterte threatened to go after individuals responsible over the concession agreements entered into by the  Metropolitan Waterworks and Sewerage System  with Maynilad and Manila Water in 1997.

Duterte expressed disapproval on a provision in the contracts that should the government interfere in implementing agreed water rates, the government should compensate the utility company for incurring losses.

The Permanent Court of Arbitration based in Singapore recently ordered the government to indemnify Ayala-owned Manila Water P7.39 billion to compensate its losses incurred between June 2015 to November 2019.

Maynilad seeks indemnification amounting to P3.424 billion in revenue losses from unimplemented rate adjustments.

Presidential Spokesperson Salvador Panelo said the government would not pay Maynilad and Manila Water despite rulings by an arbitration court in Singapore. DMS