MWSS, water firms exerting ‘all efforts’ for new concession deal

The Metropolitan Waterworks and Sewerage System (MWSS) on Friday said it is employing all means necessary with Manila Water Company Inc. and Maynilad Water Services Inc. to craft a new concession deal covering 15 years to 2037.

The DOJ is targeting to finish its version of the revised concession agreements with Manila Water and Maynilad before the end of December, Justice Secretary Menardo Guevarra earlier said.

“In view thereof, MWSS and the concessionaires will exert all necessary efforts to comply with the directive of the President to execute a new water concession agreement after 2022 which is currently being drafted by the Department of Justice  (DOJ)," MWSS Administrator Emmanuel Salamat said in a statement Friday.

Early this month, the Department of Justice found “onerous” or “disadvantageous” provisions in the government’s 1997 concession agreements with Maynilad and Manila Water, including a prohibition on government interference in rate-setting and a provision for indemnity in case of interference.

President Rodrigo Duterte has slammed the concessionaires in protest of the liability clause that holds the government liable and accountable to indemnify the companies for losses incurred as a result of government interference.

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

But the companies decided not to pursue their respective arbitral awards after Duterte unleashed a series of tirades against them.

They will instead coordinate with the government to review the supposedly onerous terms in the concessions deals.

“MWSS also acknowledges the cooperation showed by both concessionaires not only in expressly declaring that they would no longer collect or enforce the recent arbitral awards but also in their expressed willingness to renegotiate the inequitable provisions of the concession agreement,” Salamat said.

“MWSS is fully engaged in continuing to ensure the performance of its mandates under Republic Act No. 6234, as well as to achieve the purpose for, and the intention behind, the directives of the President. It is committed to materially contribute to the satisfactory resolution of the various issues for all the stakeholders,” he said.

The concession agreements that have been extended to 2037 were canceled by the MWSS.

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

The 25-year concession agreements (1997-2022) with Maynilad and Manila Water are “still valid and subsisting contracts,” Salamat noted.

“MWSS Board Resolution No. 2019-201-CO dated 9 December 2019, only revoked the previous Board Resolution No. 2009-72 dated 16 April 2009 involving the extension period from 2022 to 2037 of Manila Water Company and Board Resolution No. 2009-180 dated 10 September 2009 involving the extension of concession period from 2022 to 2037 of Maynilad Water Services Inc.,” he said.

“This action of the board did not result in the rescission or outright cancellation of the said contracts, which requires a separate and distinct act to be legally effective. As such, the government through the MWSS is giving the two concessionaires the opportunity to renegotiate and agree on the new terms of the concession agreement,” he added. —Ted Cordero/VDS, GMA News