THE Department of Justice (DOJ) has been given the go-signal by President Duterte to lay down with water concessionaires Manila Water and Maynilad Water the government’s proposed amendments to their existing contracts.
Justice Secretary Menardo Guevarra said Duterte summoned the DOJ review panel last night for a meeting in Malacañang to present to him the revised new water concession agreements, which would eliminate “onerous” provisions in the previous contracts.
Guevarra said the review panel described to the President the provisions that would have to be deleted or revised and new provisions that would be incorporated and would somehow make the water concession agreements “more equitable, more transparent and will lessen contingent liabilities on the part of the government plus improving its governance system.”
After the presentation, Guevarra said, the President has given his go-signal to negotiate with the two water concessionaires.
“In principle, the President has approved our recommendation so the next step will be to sit down with the two water concessionaires in Metro Manila to discuss the specific terms and conditions of a proposed new water concession agreement with each of them,” Guevarra said during Wednesday’s Kapihan sa Manila Bay virtual media forum.
When asked whether the government would still pursue filing of charges against those behind the disadvantageous contracts, Guevarra replied: “The President mentioned the anti-graft law last night in relation to the original water concession agreements, but gave no specific directive on whether to press charges or not.”
Guevarra said among the provisions in the existing concession agreements that would have to go are the non-interference on rate setting clause and its twin provision on indemnification arising from such government interference.
Last year, Duterte ordered the DOJ to review the concession agreements after discovering onerous provisions in the existing contracts, and after the Permanent Court of Arbitration (PCA) in Singapore issued a decision stating the Philippine government should pay P7.4 billion to Manila Water and P3.4 billion to Maynilad for the losses they supposedly incurred from unenforced water rate hike.
The President lambasted Manila Water and Maynilad and threatened to file a case of economic sabotage against the two water firms due to the onerous 1997 contracts with the government.
President Duterte made the remark after Guevarra disclosed that the justice department found the extension of these contracts to 2037 “irregular,” considering that the extension was granted 12 to 13 years before the original expiration of the 25-year concession agreements in 2022.
Guevarra said among the provisions in the old contracts that should be struck down for being onerous include the prohibition on the government s interference in the rate-setting mechanism of the two water firms and the Metropolital Waterworks and Sewerage System (MWSS).
Guevarra earlier said it would tap the assistance of consultants from the Asian Development Bank (ADB) to help in the revision of the economic and financial terms of the new concession agreement to be offered to water concessionaires Maynilad and Manila Water.