THE Ayala-led Manila Water on Tuesday said it will no longer ask the government to pay the P7.39-billion arbitral award given recently by the Permanent Court of Arbitration in Singapore. This, as the other concessionaire, Maynilad Water Services Inc., signaled it was also not pushing for payment of an earlier award by the same arbitral tribunal, for P3.4 billion covering losses arising from government’s refusal to allow tariff hikes—or a total of P10.79 billion.
At the joint hearing of the House Committee on Good Government and House Committee on Public Accounts, Manila Water President and CEO Jose Almendras said the company will cooperate with the government and will not collect the P7.39-billion award.
“We will comply with the wishes of the government and President Rodrigo Duterte,” Almendras said.
“We abide with what President Duterte wants which is to review the concession agreement,” he added.
The PCA in Singapore ruled that the Philippine government has to pay Manila Water P7.39 billion for the company’s losses from June 1, 2015, to November 22, 2019, when it was not allowed to raise tariffs.
For his part, Maynilad President and CEO Ramoncito Fernandez said Maynilad would also not ask the government to pay a similar P3.4-billion arbitral award given earlier by the same Singaporean court due to the Philippines’s refusal to allow it to increase prices for 2013 to 2017.
“We will comply with the President’s directive. [We will] not pursue the historic arbitral award,” Fernandez said.
Earlier, President Duterte said he is keen on meeting officials from Manila Water and Maynilad, as well as the government lawyers who were behind the 1997 water concession agreements, which the Department of Justice described as “onerous.”
The Chief Executive has also reiterated his threat that those behind the government contracts with the water concessionaires are liable for “economic plunder.” Prior to this, Duterte accused them of committing economic sabotage.
The President has been lambasting the water concessionaires after the PCA in Singapore ordered Manila to pay east zone concessionaire Manila Water P7.39 billion for the nonimplementation of water-rate increases that occurred prior to his presidency. The PCA had also ruled on a similar case filed by west zone concessionaire Maynilad Water Services Inc., ordering the State to pay P3.4 billion for Maynilad’s losses from March 2015 to August 2016.
‘Gracious manifestation’
Justice Secretary Menardo Guevarra said on Tuesday the decision of the water concessionaires to no longer pursue the separate arbitral awards from Singapore’s PCA would not affect the government’s bid to remove the onerous provisions of their contracts with the government.
“I also received these feelers from Maynilad and Manila Water. This is a very positive development. Although the President has said that the government will not pay these arbitral awards, at least during his term anyway, this gracious manifestation on the part of the water concessionaires, nonetheless, removes a potential liability from the books of account of the government,” Guevarra said.
“But as I said before, the issue of paying the arbitral award is not as important as ensuring that disputes arising from burdensome provisions of the water concession agreements will never happen again in the future,” he added.
Asked if they would still continue reviewing the existing contracts with the two water firms and work toward removing the onerous provisions, Guevarra replied, “certainly.”
‘Centralized agency’
Meanwhile, senators are poised to scrutinize proposals to put up a new “centralized agency” that will oversee delivery of water, sewerage and sanitation services.
The Senate Committee on Public Services, chaired by Sen. Grace Poe, scheduled a joint public hearing Wednesday with the Committees on Civil Service, Government Reorganization and Professional Regulation; Ways and Means; and Finance.
Senate probers are keen to know how the new agency intends to carry out the task to ensure improved delivery of vital water services to consumers, among others.
Poe confirmed an emerging consensus on the need to have “a lead agency whose ultimate responsibility would be the provision of adequate and safe water supply, not just for household and commercial needs, but for our farms.”
Poe pointed out the disorganized setup prompted the need to frontload passage of remedial legislation that will effectively address the problems bugging the water service sector.
The senator, in a statement on Tuesday, noted that “what we currently have is a fragmented regulatory framework for water that has limited powers, which has a significant impact on the delivery of water and sanitation services in the country.”
Senators sitting in the joint committee hearing will also review several related bills filed by Senate President Pro Tempore Ralph Recto, Senate Minority Leader Franklin Drilon and Senators Ramon Revilla Jr. and Lito Lapid, all proposing to create a new water agency. These are related to the proposals filed by Senators Emmanuel Pacquiao, Francis Tolentino and Ronald de la Rosa batting for the creation of a Department of Water Resources Management.
At the same time, Poe indicated the hearing will also enable other proponents to “offer an opportunity to bring to the table questions about the government contracts with water concessionaires.”
Moreover, the senator signaled that lawmakers could consider passing their own version of the water agency bill soon, even as enacting a water reform law is high on the list of President Duterte’s priority measures. “We want assurance of the people’s right to clean and steady supply of water,” said Poe. With Joel San Juan and Butch Fernandez