Gov’t exploring all options in water deals: DOJ

Guevarra stressed that the contracts are not iron-clad and noted that “there is a contractual provision on amendments to the concession agreement”. (PCOO file photo)

MANILA — Justice Secretary Menardo Guevarra on Thursday said the government is exploring its options in provisions found within the agreements between the government and water concessionaires Maynilad and Manila Water.

In a message to newsmen, Guevarra said the government is “more interested in getting a new deal than in compromising the arbitral award” issued by the Singapore arbitration center which awarded billions to the firms.

Guevarra stressed that the contracts are not iron-clad and noted that “there is a contractual provision on amendments to the concession agreement”.

The DOJ chief likewise explained that under law, the government cannot be held hostage to unlawful provisions.

“The state is not estopped by the mistakes of its agents, especially if the acts committed are constitutionally or legally infirm. and the statute of limitations does not apply if the act sought to be set aside is void for being contrary to law or public policy. In any event, there is a standard separability clause that leaves other valid provisions effective,” Guevarra said.

“Our legal remedies are not mutually exclusive,” Guevarra said, noting that the Office of the Solicitor General is contemplating judicial remedies locally and/or abroad.

He added that some members of the Cabinet want an overhaul of the existing concession agreements and that others are thinking of more drastic actions.

“PRRD has asked the DOJ to come up with an integrated solution. We’ll do,” Guevarra said.

Manila Water is a subsidiary of Ayala Corporation, while businessman Manuel V. Pangilinan’s Metro Pacific Investments Corporation owns a controlling stake in Maynilad.

The two private companies distribute water in Metro Manila and other parts of the country under agreements signed with state regulator Metropolitan Waterworks and Sewerage System (MWSS) in 1997.

In a speech on Tuesday night, President Duterte lashed out at the water concessionaires after a review conducted by the DOJ showed the water contracts were “onerous and disadvantageous to the people, relative the terms or periods, government non-interference, as well as concessionaire indemnification for losses.”

Due to the two provisions, the government was ordered by the Singapore arbitration court to pay Maynilad about PHP3.6 billion and, recently, PHP7.4 billion to Manila Water as compensation for losses and damages.

The DOJ chief said another onerous provision is the extension of these contracts to 2037 considering that the extension was granted 12 to 13 years before the original expiration of the 25-year concession agreements in 2022.