Lawmaker seeks review of water contracts

MANILA A party-list lawmaker on Wednesday stressed the need to correct the infirmities in the water contracts that are disadvantageous to consumers.

Bagong Henerasyon Party-list Rep. Bernadette Herrera made the statement after President Rodrigo Duterte threatened to sue water concessionaires Manila Water Co. Inc. and Maynilad Water Services Inc. for economic sabotage over irregularities in the concession agreements the firms signed with the government in 1997.

"It seems reckoning time has come for Maynilad and Manila Water now that President Rodrigo Roa Duterte himself has fired a clear warning shot against their concession contracts which are clearly disadvantageous to the public, Herrera said.

Herrera said the Metropolitan Waterworks and Sewerage System (MWSS) could put on hold any pending petitions for water rate hikes until the contract infirmities are rectified in favor of consumers, not the water concessionaires.

The lawmaker also suggested that the Local Water Utilities Administration could order a moratorium on any ongoing negotiations for the provision of services to water districts by Maynilad and Manila Water to stop their duopoly from seizing control of all water districts nationwide."

The Philippine Competition Commission could step into the situation to make sure Maynilad and Manila Water abide by the country's anti-trust and monopoly regulation laws, she noted.

Herrera said more water concessionaires should break the duopoly of Maynilad and Manila Water.

There is more than enough room for at least three more water concessionaires in the country to effectively address huge gaps in water service reliability, safety, and affordability, she added.

Meanwhile, Duterte also asked Finance Secretary Carlos Dominguez III and Solicitor General Jose Calida to craft a new contract that is really favorable to government.

Upon instruction of the President, the justice department reviewed the 1997 water concession agreements and "found a dozen provisions that were deemed onerous or disadvantageous to the government and the consuming public.

Guevarra said that one of the most notable onerous provisions in the concession deals was the prohibition against government interference in rate-setting and the provision on indemnity for possible losses in the event of such government interference.

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.

Guevarra 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. (PNA)

Source: Philippines News Agency