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Water firms’ input on new contracts to be considered — DoJ

water firms input on new contracts to be considered doj - Water firms’ input on new contracts to be considered — DoJ

METRO MANILA’s water distributors will have the opportunity to comment on amendments to their concession contracts, Justice Secretary Menardo I. Guevarra said.

“These proposed new contracts intend to remove all illegal provisions and foster greater transparency and equitability in rate-setting, and should therefore provide a more stable and comfortable environment for investors,” Mr. Guevarra told reporters in a mobile-phone message.

“These proposed new contracts will not be absolutely imposed upon the water concessionaires, as they will be given a reasonable opportunity to comment on the proposed amendments in an open and public discussion of the issues,” he added.

Senator Francis N. Pangilinan has said that President Rodrigo R. Duterte’s threat to prosecute officials of Maynilad Water Services, Inc. and Manila Water Co., Inc. officers and investors if they refuse to accept the government contract was illegal.

Mr. Guevarra also said that government officials and water concessionaires who entered into the contract “and implemented these highly disadvantageous contracts” were those threatened by the President with possible criminal charges, and not the investors.

He also said that any takeover of water distribution, which is authorized by the Constitution, “is the government’s last option.”

Mr. Duterte said last week that the government will offer new contracts to the water concessionaires, adding that a government takeover of water services and criminal prosecution were on the table should the contracts be rejected.

Mr. Guevarra said last year that government lawyers found onerous provisions in the water contracts, including a provision that obliges the government not to interfere in rate-setting.

They also found irregular the extension of their 1997 contracts until 2037, which was undertaken 12 to 13 years before the expiration of the original deals in 2022.

Mr. Duterte has claimed that the water concessionaires committed economic sabotage following Manila Water’s disclosure last year that an arbitration court ruled that the company is entitled to a P7.39-billion indemnity from the government for the losses it suffered.

A Singapore arbitral body in October also upheld a P3.4 billion award to Maynilad.

The water companies said during hearings at the House of Representatives that they will no longer pursue collection on the award. — Vann Marlo M. Villegas

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