House leader questions panel approval of 25-year franchise for Manila Water, Maynilad

FILE PHOTO: Not enough water coming out of the faucet due to water service interruptions. INQUIRER.net file photo / Katherine G. Adraneda

MANILA, Philippines — A lawmaker has raised questions over the move of a House of Representatives committee, which approved a 25-year legislative franchise for Manila Water Company Inc. and Maynilad Water Services Inc.

Bagong Henerasyon party-list Rep. and House Deputy Speaker Bernadette Herrera said the committee-level approval of two separate bills granting the 25-year franchise to the two water companies go against the terms stipulated in the Revised Concession Agreement (RCA) recently entered into by the government via the Metropolitan Waterworks and Sewerage System (MWSS) with East Zone concessionaire Manila Water and  West Zone concessionaire Maynilad.

The RCA allows the two water firms to retain their concession areas until 2037.

But according to Herrera, the approved House Bill No. 9313 and HB 9367 will give Manila Water and Maynilad legislative franchise to operate until 2046.

“What will happen after 2037? Will these concessionaires bid again to get the concession? If yes, then this must be stated explicitly in the franchise contract,” she said in a statement on Friday.

She also asked what will happen to the franchise given to the water concessionaires if both did not win the bid for concession.

Herrera then suggested that Manila Water and Maynilad’s franchises should also end by 2037 to correspond with their RCAs with the national government.

“I believe the franchise alone shouldn’t and couldn’t extend their concession after 2037. There should be no gray area on this matter. It must be clear what will happen after 2037,” she noted.

Last May 24, the House committee on legislative franchises approved HB 9313 and HB 9367.

READ: House panel approves Maynilad, Manila Water franchises

Like other members of the House, Herrera also noted the several issues facing the two water service firms.

“It is becoming apparent that these bills are lacking the safeguards that are in the RCA, and it is dangerous to allow these bills through the legislative mill without further scrutiny, as to amend or revoke the franchise would then require another legislation,” she explained, adding that this set up resulted in “numerous abusive activities by water concessionaires.”

The party-list legislator said these water concessionaires are considered public utilities requiring franchise under Section 11, Article XII of the 1987 Constitution.

Herrera further questioned the absence of a provision for dispute resolution in the committee-level approved bills which, according to her, also runs counter to the RCA which requires “dispute resolution of consultation and arbitration in the event of a dispute.”

“The bills, which are an attempt to provide a legislative franchise, do not contain such requirement,” she noted.

“The RCA’s dispute resolution requires the Philippines as the seat of arbitration and Manila as the venue, with only Filipino citizens as arbitrators,” she added.

Moreover, Herrera said HB 9313 does not contain specific reportorial requirements as rigid as the RCA, which compels water concessionaires to submit to the MWSS-Regulatory Office a quarterly performance report and an annual financial report.

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