Duterte warns water firms: Accept new deal or get contract canceled

MANILA, Philippines — President Rodrigo Duterte warned Maynilad and Manila Water to accept the new contracts without the “onerous” provisions or get their water contracts canceled, Malacañang said Tuesday.

Palace spokesman Salvador Panelo, however, noted there is no guarantee that the water concessionaires will not be prosecuted for crafting the original contracts.

“The Chief Executive is giving the water concessionaires the option of accepting the new contracts without any guarantee of not being criminally prosecuted together with those who conspired to craft the very onerous contracts which are void ab initio for violating the Constitution and the laws of the land,” Panelo said in a press briefing.

“Should Maynilad and Manila Water refuse to accept the new agreements, the Chief Executive will order the cancellation of their present water contracts, mandate the nationalization of water services in their respective areas of operation and prosecute all those involved, directly or indirectly, in the arrangement that led to the present suffering of the Filipino people,” he added.

During the Cabinet meeting Monday night, Panelo said the President pointed out how water should not be “exploited” to rake billions at the expense of its consumers.

“The President stressed that water is a God-given natural resource which can not be treated as a mere commercial commodity and exploited to rake in billions of pesos in profits at the expense of the Filipino people. As President, he can not keep a blind eye to this colossal rip off,” Panelo said.

Duterte had earlier slammed Maynilad and Manila Water for supposedly milking billions from the people and the government over the disadvantageous 1997 water contract.

The President also previously threatened to sue the water firms due to the “onerous” provisions of its contract with the government.

Among these “onerous” provisions, Duterte said, were the prohibition against government interference in rate-setting and the provisions on indemnification for possible losses in the event of such interference.

“The Filipinos have lost enormously with the unabated collections by these concessionaires despite the latter’s dismal performance in supplying, delivering and distributing water. As the President previously uttered in righteous indignation and outrage to them: ‘If you will not give justice to the Filipino people, I will get it for them,’” Panelo said.

Crafted by the Office of the Solicitor General and the Department of Justice, Palace said the new water contract was meant to replace the “flawed water concessionaires agreements that violated every prohibited act in the anti-graft law.”

“We are still in the process of consolidating a new draft. We’ll have to integrate the inputs of the DOF on the financial and economic aspects,” Justice Secretary Menardo Guevarra said.

“The provisions that would surely be taken out pertain to the inclusion of certain business taxes in the determination of water rates, including corporate income tax, and the prohibition against the interference of the state in rate-setting,” he added.