New deals would not be harmful to water concessionaires: DOJ

January 8, 2020

The Department of Justice on Wednesday said the new water concession agreements will not be harmful to the two water concessionaires in Metro Manila and he believes these firms will accept these.

Justice Secretary Menardo Guevarra said the new contracts will remove provisions considered to be highly disadvantageous to the government and replace it with “more equitable” provisions.

"A gun will kill you. It's not something that we will offer to the water concessionaires," Guevarra told ABS-CBN News Channel.

"It's something that will give life, life in the sense that it will be a better contract. You remove all illegal provisions, you put in terms that will be more equitable to the government and to the people so that's a good contract. It's not something that will kill the water concessionaires," he added.

President Rodrigo Duterte ordered the review of the government’s concession agreement with Maynilad and Manila Water Services even before the two water concessionaires separately won arbitration cases before the Permanent Court of Arbitration.

The court ordered the Philippine government to compensate the two companies for multi-billion peso losses it incurred as water rate hikes were not implemented.

The review conducted by the justice department said the contracts contained several "onerous" provisions grossly disadvantageous to the government.

This prompted both water concessionaires to announce they will no longer pursue the arbitral awards.

Guevarra stressed that these provisions include a prohibition on the government from interfering in rate-setting and a requirement to indemnify them in case of such an interference. DMS