Gov’t lawyers blamed for water concession deals

MANILA, Philippines — President Rodrigo Duterte said he won’t allow a settlement with Manila Water Co. Inc. and Maynilad Water Services Inc. until he had talked with their officials as well as the government lawyers who had been involved in the preparation of the contracts with the private companies that he considered onerous.

On Monday, Duterte continued to rail against the water concession contracts and blasted the two administrations that allowed the deal to happen.


Speaking at the oath-taking of newly promoted police and military officials in Malacañang, Duterte initially said he would not talk to Manila Water and Maynilad, and scoffed at the idea of entering into a compromise with them.


“How will I compromise? That’s plunder, that’s the classic economic plunder. How can I tell the people as President that we just negotiate over this? Tell me how I will tell the people about this,”he said.


But he later said he wanted to talk to the water concessionaires and the government lawyers involved in the deal.

He blamed the government lawyers for “selling this country down the drain” and said they should be disbarred.

He did not spare the administrations that agreed to the contract, which he said affected the country’s sovereignty. The Philippines is unfortunate, he said. “I cannot imagine two administrations allowing our sovereignty to be bargained away.”

The 25-year water concession agreements were signed in 1997 during the Ramos administration and extended in 2009 during the Arroyo administration to 2037, long before their expiration in 2022.

Duterte said even the children of his grandchildren would be bathing in water that is not even potable.

He also said that if he could not proceed against the water companies criminally, he would run after them civilly.

The President castigated them anew for passing on corporate income tax to consumers.


He earlier said he wanted new water deals that would favor the public and the government. He said he wanted the concessionaires charged with economic sabotage.

His tirades came after the Singapore-based Permanent Court of Arbitration ordered the government last month to pay Manila Water P7 billion for losses it suffered due to disallowed water rate increases in 2013-2017.

The court ordered the government in 2017 to pay Maynilad P3.6 billion.

Manila Water said it was willing to come up with a “workable solution.”


Justice Secretary Menardo Guevarra said the government would take Manila Water and Maynilad to court if they refused to renegotiate their 1997 concession agreements.

Guevarra told reporters on Monday that the government was more focused in correcting the concession contract than in barring the P11-billion arbitral award to the two companies.

A legal team will draw up a new agreement hopefully before the end of the year, he said. Then the government will sit down with the concessionaires.

The Department of Justice has found a dozen onerous provisions in the 1997 contract, foremost of which is one that prohibits the government from interfering in setting water rates.

The other questionable provisions “classify certain financial expenses that have no direct relation to actual operations, such as business taxes, penalties, etc., as expenditures that may be passed on to the consumer through the water charges,” Guevarra said.

He said the government would “to take over if necessary” in case the two concessionaires stop distributing water in Metro Manila and nearby areas, although the justice secretary said the scenario was remote.

Guevarra also said the government was not looking at entertaining new concessionaires at the moment.

“It’s only when the courts order the rescission of the water concession agreements that the government may open the field to competition, unless the government itself can take over actual operations, which is rather unlikely,”he said.

In the House of Representatives, an opposition lawmaker on Monday warned against what he described as the possible “Villarization”of water services after Duterte praised the clan led by billionaire and former Sen. Manuel Villar while castigating Ayala-run Manila Water and Pangilinan-and Consunji-controlled Maynilad.

Bayan Muna Rep. Ferdinand Gaite expressed alarm at Duterte’s apparent partiality toward his allies, the Villars, owners of PrimeWater Infrastructure Corp., a distributor in control of scores of local water districts.

He said the best way to solve the country’s water problems was nationalization of services, and “not the transfer of control to his crony, not Villarization.”

Duterte suggested that the Villars take over Metro Manila’s water supply system as he assailed what he deemed onerous concession agreements with Maynilad and Manila Water.

The Inquirer tried to get the side of PrimeWater, a business led by eldest son Paolo Villar who also runs Vista Land and Lifescapes, but a spokesperson said the group had “no comment” on this matter.

63 water districts

Gaite said transferring the concession deals to the Villars would not accomplish anything despite Duterte’s endorsement.

“Villar’s PrimeWater already has effective control of 63 local water districts through its 25-year partnership agreements with them, and where these agreements are in effect consumers have been complaining of very expensive but poor service,”he said.

“In San Pablo, the Water District Employees Association president reported that consumers now pay almost P1,200 per month, up from P400 before PrimeWater came in, but recently they have been experiencing extreme water shortage,”he said.

“Even the Commission on Audit flagged PrimeWater’s inefficiency. We already asked Congress to investigate this new wave of privatization that is targeting local water districts,” Gaite said.—With reports from DJ Yap and Doris Dumlao-Abadilla

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TAGS: Manila Water Co. Inc., Maynilad Water Services Inc., Rodrigo Duterte, water concession agreements
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