The two private firms distribute water in Metro Manila and parts of Cavite and Rizal provinces under agreements signed with the Metropolitan Waterworks and Sewerage System (MWSS) in 1997 during the Ramos administration following what was then called “the world’s largest water privatization.”
The President also ordered Solicitor General Jose Calida and Finance Secretary Carlos Dominguez III to come up with a new water concession contract that is favorable to the public and the government.
“This is the amended contract, accept it or nothing to it,” he said.
Duterte said he was willing to go down for his decision but would drag with him the “oligarchs” who considered water a commodity and not a natural resource.
“We will expose them. And I will insist that they be tried for economic sabotage. If they do not accept that case, now is the time that we talk seriously, the buying of cases,” he said on Tuesday night.
12 ‘onerous provisions’
He went on: “I will file this. Economic sabotage and I will arrest all of them. I will let [them] taste the life behind bars.”
The President even asked why senators had agreed to the 1997 deal, which the Department of Justice (DOJ) said had 12 onerous provisions that were disadvantageous to the government.
At another speech in Malacañang, Duterte questioned Senate Minority Leader Franklin Drilon for warning him against unilaterally canceling the contracts with Manila Water and Maynilad following a water crisis in March.
“I distinctly recall that Drilon said something, ‘Oh President Duterte, do not tinker with that contract because we will end up paying so many billions of pesos,’” he said.
Duterte added: “Senator Drilon, are you one of those who profited from that? I’m asking you. I said I am ready to get out. I am not threatening you, but if I go down, I will bring you with me.”
Asked for comment, Drilon on Tuesday night said, “I did not in any manner participate in the drafting of the concession agreement.” Drilon became senator in 1995.
The President made the remarks the day after a Cabinet meeting in which the DOJ reported that the 1997 agreements contained 12 provisions disadvantageous to the government and the public.
No gov’t interference
Among these provisions were the “prohibition against government interference in rate-setting, and the provision on indemnity for possible losses in the event of such government interference,” Justice Secretary Menardo Guevarra said on Tuesday.
He pointed out that “due to these twin provisions, the government was ordered by the Singapore arbitration court to pay Maynilad about P3.6 billion and, recently, Manila Water, P7.4 billion as compensation for losses or damages.”
“The DOJ also found the extension of these contracts to 2037 irregular, considering that the extension was granted 12 to 13 years before the original expiration of the 25-year concession agreements in 2022,” Guevarra said.
The President was reportedly “upset, if not angered” during the Cabinet meeting on Monday night when the DOJ reported its review of the water concession deals.
Ayalas, Pangilinans
He said on Tuesday night that he was not afraid of going down because of his decision, promising to make the lives of the Ayalas and the Pangilinans “very, very, very miserable.”
The Ayalas own the controlling stake in the publicly listed Manila Water while a company being run by Manuel V. Pangilinan is a shareholder of Maynilad along with the Consunjis.
Duterte slammed both private water firms of treating water like a commodity and not as a natural resource.
“The contract is so one-sided, because if they fail to realize the profit during the lifetime of the contract or at any period, we will pay for their losses. You sons of bitches, if that is so,” he said.
He said the government was not allowed to raise or lower water rates, and that the private water firms kept on charging the public for waste water treatment facilities that were never built.
Duterte also criticized the Ayalas for not paying corporate taxes.
Water rate hike
He then accused Manila Water and Maynilad of faking the water shortage last March because “they were waiting for the next round of increase” in water charges.
Such actions, he said, only “screwed us” and were only “contributing to the deterioration of society.”
“I said I’m ready to go. But if it’s like this, I will not go without a bang. I will expose these rich people who are profiteering from the nation for free. Corruption is really at the top, not at the level of the Customs,” he said.
As to the Singapore arbitration tribunal’s order for the Philippine government to indemnify Manila Water, Duterte accused the private companies of being a “member” of a “club” or “brotherhood” of rich corporations.
“There they are, the rich, interlocking. We lost in the arbitration in Singapore because they are members of that. A club. We lost in the arbitration twice,” he said.
The President called the two concessionaires “shameless.”
The President ordered the DOJ and the Office of the Solicitor General to review the concession agreements with Manila Water and Maynilad after Metro Manila experienced water shortage in March.—WITH A REPORT FROM INQUIRER RESEARCH