Replacing Manila Water, Maynilad not yet on the table, says DOJ’s Guevarra

Justice Secretary Menardo Guevarra has allayed concerns that the government is bent on replacing Metro Manila’s water concessionaires with a new player in light of onerous provisions in the concession agreements.

Speculations were rife that President Rodrigo Duterte was coming down hard on Maynilad and Manila water with a view to replacing concessionaires with the company of the Villar family, a political ally of the President.

“No, we are not even thinking about that,” Guevarra told reporters in a recent interview. “We are still considering them,” he said referring to Maynilad and Manila Water.

“We are just renegotiating their contracts,” the Justice chief said.

Early this month, Guevarra said that the Department of Justice found “onerous" or "disadvantageous" provisions in the government’s 1997 concession agreements with Maynilad Manila Water.

These include a prohibition on government interference in rate-setting and a provision for indemnity in case of interference.

Duterte has slammed the concessionaires in protest of the liability clause that holds the government liable if it interferes with the implementation of agreed water rates and accountable to indemnify the companies for losses incurred.

The Permanent Court of Arbitration in Singapore has ordered the Philippine government to pay Maynilad around P3.6 billion and Manila Water P7.4 billion as compensation for losses or damages due to the liability clause.

Manila Water and Maynilad are no longer pursuing their respective arbitral wins after Duterte unleased a series of tirades against the companies, and will instead coordinate with the government to review the supposedly onerous terms in the concessions deals.

Finance Secretary Carlos Dominguez III earlier said he told Manila Water and Maynilad to outline a new concession deal with the government, minus the disadvantageous items to avoid “long” and “drawn-out discussions.”

The concession agreements that have been extended to 2037 were canceled by the Metropolitan Waterworks and Sewerage System (MWSS).

During a board meeting last December 5, the MWSS directors revoked a resolution drawn during the Arroyo administration approving the extension of the concession agreements. The resolution extended the concession agreement by another 15 years from 2022.

“So if we don’t have any agreement, then we have to go to court para ‘yung rescission may be actually done,” Guevarra said.

Recission is an act of rescinding or terminating a contract by mutual agreement or because of fraud or some legal defect.

“But only then will we open the field to other competitors. ‘Di naman kaagad na di magkasundo, open na to third parties. ‘Di naman ganun,” Guevarra said. —VDS, GMA News