Gov’t signs new deal with Manila Water

MANILA, Philippines — The government and one of the country’s biggest water distributors signed a new agreement on Wednesday, more than a year after President Rodrigo Duterte ordered a review of the allegedly onerous contracts awarded to the two private concessionaires that operate in Metro Manila.

Justice Secretary Menardo Guevarra said officials of Ayala group-led Manila Water Co. Inc. and the state regulator, Metropolitan Waterworks and Sewerage System (MWSS), signed the revised contract.

He told the Inquirer that the new agreement was “a lot more equitable than the original one.” He did not elaborate, saying only that it would “definitely [result in] better overall service and more reasonable charges to consumers.”

“But I can’t say with any certainty if the government will still pursue any legal action arising from the old agreement. There are many factors to consider,” he said in a Viber message to reporters.

Review of agreements

Duterte assigned Guevarra to lead the review of the 25-year water concession agreements between Manila Water and Maynilad Water Services, and the Ramos administration in 1997.

Guevarra said discussions on a similar deal with Maynilad, which is controlled by business tycoon Manuel V. Pangilinan, would be done after the Lenten break.

The original contracts were supposed to end next year. But these were extended for 15 years in 2009 during the Arroyo administration.

Full disclosure

Renato Reyes Jr., secretary-general of Bagong Alyansang Makabayan (Bayan), demanded that the new contract be disclosed to the public, saying that it was “negotiated in secret” and without any public participation.

“Consumer groups as well as Congress should be able to study the concession agreement,” Reyes said in an interview. “As end-users, we should have been consulted by the government. This was never done.”

Bayan is pushing the nationalization of water supply and sanitation services, arguing that the sector in private hands “will always be subject to profiteering.”

Jeric Sevilla, a spokesperson for Manila Water, told the Inquirer that the transaction would be disclosed to the Philippine Stock Exchange.

In December 2019, the President threatened to jail and sue officials of the two water companies for allegedly benefiting from the contracts that were disadvantageous to both the government and the public after the justice department disclosed that the agreements had at least 12 onerous conditions.

One of them was to indemnify the companies in case of profit losses due to “government interference” in water rate adjustments.

Guevarra said that provision was the reason a Singapore arbitration court had ordered the government to pay P3.6 billion to Maynilad and P7.4 billion to Manila Water as compensation for “losses or damages.”

He said that the contract extension was “irregular” because it was done about 13 years prior to the scheduled expiration of the agreements in 2022.

—WITH A REPORT FROM RONNEL W. DOMINGO