Gov’t won’t pay compensation to water concessionaires: Palace

Presidential Spokesperson and Chief Presidential Legal Counsel Salvador Panelo insisted that the government would not acknowledge the ruling because it is based on “onerous” contracts. (File Photo: Office of the Presidential Spokesperson/Facebook)

MANILA — Malacañang said Thursday the government will not pay water concessionaires Maynilad Water Services, Inc. and Manila Water Co. billions of pesos worth of compensation despite the ruling of the Permanent Court of Arbitration in Singapore.

Presidential Spokesperson and Chief Presidential Legal Counsel Salvador Panelo insisted that the government would not acknowledge the ruling because it is based on “onerous” contracts.

“Hindi kasi nga onerous ang kontrata. Masyadong disadvantageous sa gobyerno (No, we won’t pay them because the contracts are onerous. It’s too disadvantageous to the government),” Panelo said in an interview over DXL.

“Meron tinatawag na mga kontratang labag sa public policy. Pag ‘yan ay napatunayan ng hukuman, ‘yan ay ina-annul (There are contracts that are against public policy. If we can prove that in court, it will be annulled),” he added.

Panelo lamented how the privatization of water distribution in 1997 was “unfair” and “one-sided.”

“Nagiging problema kasi nga yung mga kumakatawan sa gobyerno hindi interes ng kanilang pinaglilingkuran, interes ng kabila kaya ganyan ang nangyayari (The problem is representatives of the government are not considering public interest but personal interest. That’s why this is happening),” he said. “Yung kontrata nakalagay dun pag sila’y nalugi for whatever reason e kailangang bayaran natin sila. Saan ka naman nakakita (The contract says that if the water concessionaires acquire losses for whatever reason, the government has to pay. Where did you see such a contract)?”

The Singapore arbitration has ordered the government to pay about PHP3.6 billion to Maynilad and recently, PHP7.4 billion to Manila Water for the non-implementation of water rate increases and compensation for losses and damages, respectively.

Manila Water is a subsidiary of the Ayala Corp. while businessman Manuel V. Pangilinan’s Metro Pacific Investments Corp. 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.

A review conducted by the Department of Justice (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.”

On Tuesday, President Rodrigo Duterte directed the DOJ and Office of the Solicitor General to draft a new water concession contract that is “favorable to the State and the Filipino people.”

He also asked them to file economic sabotage cases against all those involved in the agreements, including the latter’s owners and legal counsels, and agents and lawyers of the government.

Earlier, Panelo said the water concessionaires were “bleeding our country dry” due to the onerous contracts which, citing the President, treated water as a “commodity” and not as a natural resource.