Gov’t to contest arbitral award to Manila Water

MANILA, Philippines — The Ayala family-owned Manila Water Inc. is not the exemplary and outstanding company it is painting itself to be and has in fact disadvantaged the Filipino people through onerous provisions in a concession agreement that it violated when it failed to develop new waters sources and even caused continual water shortages, according to Solicitor General Jose Calida.

“We will not allow corporate greed to triumph without a fight,” Calida said in a statement on Friday, reiterating that the government would exhaust all legal remedies to get a better deal for Filipino consumers, enforce the Constitution which requires all public utilities to government regulation and prevent abusive profiteering off the people.

“The OSG (Office of the Solicitor General) shall continue to protect and defend the interest of the public,” Calida said. “Public interest and welfare shall always prevail. The OSG will exhaust all available remedies to this end.”

Calida conceded that the government is obliged to keep secret the proceedings of the Permanent Court of Arbitration in Singapore that awarded Manila Water compensation of P7.39 billion for losses the water utility supposedly suffered between June 2015 and November 2019 because the government prevented the company from increasing its price.

But, Calida stressed, the government “cannot just simply stand by and watch” the water firm “spin the circumstances and paint itself as an exemplary, outstanding company” when, in fact, the arbitration proceeding “tells a very different story, one which will naturally reveal itself through the next actions we will undertake.”“Our next steps will show that the arbitral award was not, to quote Manila Water, due to a ‘procedural lapse’ by [the] government. It is a company’s refusal to become the subject of a legitimate regulation,” he said.

Manila Water itself announced in February that the company “continued on its path to growth in 2018, posting net income increase of 6% from the previous year to reach P6.5 billion.”

Last month, Manila Water complained on its website that it spent up to P7 billion for the first three quarters of 2019 because of the penalty the Metropolitan Waterworks and Sewerage System imposed on the company for reneging on its obligation to provide water to Metro Manila and surrounding areas.

Still, the company reported earnings of 4.4 billion as of the 3rd quarter and admitted that the “dampened performance” was caused mainly by the water supply shortage in its Manila Concession early this year.