DOJ lauds concessionaires’ decision not to collect gov’t payment

Guevarra said the government is now pursuing efforts to rework the terms of the 1997 concession agreements to remove onerous provisions. (PCOO file photo)

MANILA — Justice Secretary Menardo Guevarra on Tuesday welcomed Maynilad and Manila Water’s decision not to pursue the more than PHP10-billion compensation they were seeking from the government, which the Permanent Court of Arbitration in Singapore has rewarded them.

“I also received these feelers from Maynilad and Manila Water. This is a very positive development,” Guevarra told reporters when sought for comment.

“Although the President has said that the government will not pay these arbitral awards, at least during his term anyway, this gracious manifestation on the part of the water concessionaires nonetheless removes a potential liability from the books of account of the government,” Guevarra said.

Guevarra said the government is now pursuing efforts to rework the terms of the 1997 concession agreements to remove onerous provisions.

“But as I said before, the issue of paying the arbitral award is not as important as ensuring that disputes arising from burdensome provisions of the water concession agreements will never happen again in the future,” Guevarra said.

He said the contracts are not iron-clad and “there is a contractual provision on amendments to the concession agreement”.

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 concessionaires supply water in Metro Manila and nearby areas under agreements signed with state regulator Metropolitan Waterworks and Sewerage System (MWSS) in 1997.

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.