Revised Manila Water, Maynilad deal arrived at sans public consultations –Infrawatch

Think-tank Infrawatch on Monday raised concerns over the government's revised water concession agreements that were arrived at without public consultations and which had terms that onerously favored the government.

"In shutting the public out of negotiations for the revised water concession involving the MWSS (Metropolitan Waterworks and Sewerage System), Manila Water and Maynilad, the Duterte government has crafted a lopsided water concession agreement that strengthens government control but not necessarily serving the public interest nor results in improved services," Terry Ridon, convener of Infrawatch, said in a statement.

"While the revised concession agreement raises the public character of the concession to the level of public utilities, it has drafted the revised concession agreement on unprecedented yet very onerous terms: favoring government, limiting private sector discretion but not necessarily benefiting the public, which should be the core interest in all of these negotiations," he added.

Infrawatch, a non-government organization evaluating the country's infrastructure and development projects, took particular note of the requirement that all debt and expenditures of the concessionaire should be reviewed and approved by the Regulatory Office.

According to Ridon, the provision cancels private sector independence and destroys the nature of the concession as a PPP (Public-Private Partnership), effectively reducing the concessionaires into mere suppliers or vendors of government.

"This contradicts private sector independence in investment and operations initiatives, which is a main feature in PPPs," he added.

The non-government organization also took issue with the removal of the Foreign Currency Differential Adjustment (FCDA) in the concession deal as it is still a standing policy for other public utilities.

"Fourth, the removal of FCDA, while beneficial to the public as it transfers foreign currency risk to the concessionaires, runs the risk of being challenged as a violation of equal protection, as the FCDA remains standing policy in other public utilities," Ridon pointed out.

"Government should first make a general policy statement that FCDA is now prohibited in all public utilities in order to surmount a possible constitutional challenge," he added.

Under the water concession agreement, the FCDA was removed because it would result in much lower tariff increases and protect the consumer from possible tariff spikes because of foreign exchange movements.

Palace spokesman Harry Roque said the new water deal was patterned after the joint venture agreement of the Bases Conversion and Development Authority (BCDA) and Malaysian firm MTD Capital Berhad for building sports facilities in New Clark City as advised by the Asian Development Bank.

He added that the new agreement will "protect the government and its consumers." — DVM, GMA News