Allowing water firms to take claims to international court is onerous, says DOF chief

Department of Finance Secretary Carlos Dominguez III branded as "onerous" a provision in the government contract with two water concessionaires that allows the latter to seek arbitration proceedings before an international body.

Dominguez said water firms Manila Water Company and Maynilad Water Services are under the regulation of the Metropolitan Waterworks and Sewerage System (MWSS).

“If you are in a regulated industry, like banks, you are regulated by the Central Bank. If the Central Bank issues regulations you don’t agree with, do you go to Singapore for arbitration? No. You have to follow the regulation here," he said.

"If you are invested in a power company, you are regulated by the ERC (Energy Regulatory Commission). If you don’t agree with their regulation, can they go to Singapore to ask somebody to decide for you? No,” he added.

“Why is it in the [case of] water concessionaires, you can go to Singapore and challenge a regulation here in the Philippines? Isn’t that onerous?,” Dominguez said.

He stressed that regulation is the job of the government.

As government regulator of water services, MWSS is tasked to "monitor the compliance of concessionaires with their contractual obligations, enforce standards of service to customers and determine reasonable rates in the delivery of water and sewerage services."

The Permanent Court of Arbitration in Singapore has ordered the Philippine government to pay Manila Water P7.39 billion for the company’s losses from June 1, 2015 to November 22, 2019 or during the time Manila Water was barred from raising water rates.

Another ruling by the same court ordered the Philippine government to pay Maynilad Water Services Inc. P3.424 billion in revenue losses from unimplemented rate adjustments.

Prior to the ruling by the Singapore court, the Philippine Supreme Court imposed more than P2 billion in fines on both water concessionaires for violating the Philippine Clean Water Act, which requires them to put up sewage systems in their service areas 10 years ago.

In addition, the MWSS has also fined the said water concessionaires for service interruptions in their respective markets in early 2019.

The government's decades-old concession agreements with Maynilad and Manila Water were already revised to supposedly remove "onerous" provisions, but details of the new contract are yet to be revealed to the public.

When the Singapore-based arbitration court ruled in the water firms’ favor, President Rodrigo Duterte was quick to stress that the Philippine government will not shell out a penny to comply with such ruling amid poor services and prolonged water interruptions at that time.

The President’s pronouncements later prompted water firms to shelve their legal victory. —LDF, GMA News