Solon: Voiding of water firms' deal extension chance for renegotiation

The cancellation of the contract extension of Maynilad Water Services Inc. and Manila Water Company Inc. is a chance for a renegotiation with the government on some concerns, a lawmaker said Thursday.

On Wednesday, the Metropolitan Waterworks and Sewerage System (MWSS) said its board has revoked a previous resolution approving the extension of the concession agreements.

This move also aims to assure enough water supply, Deputy Speaker Surigao del Sur 1st District Representative Prospero Pichay, Jr. said in an interview on ANC.

“The scrapping of the extension to [the deal ending in] 2022 is for them to renegotiate…If there is an agreement, it gets to be respected. In an agreement, if one party disagrees, he has to go to the court and revoke it,” he said.

After the announcement of the cancellation, the water concessionaires warned of more than a 100% water rate increase.

The contracts with Maynilad and Manila Water were previously extended to 2037, which is 15 years after their expiration in 2022.

President Rodrigo Duterte recently protested a provision in the contracts that holds the government liable if it interferes in the implementation of water rates. Also, the state should indemnify the firms for losses.

Citing this particular clause, 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 due to unimplemented rate adjustments.

The government said it would not pay the amounts. But the two concessionaires eventually retracted in asking the government to pay them.

According to Pichay, the purpose of Duterte for this action is to have MWSS renegotiate the “onerous” provision in the contracts and remove it.

Amid the recent threat of water firms to increase rates, Pichay hinted a possible decrease in water rates if the renegotiation also results in longer years of extension of the firms’ contracts.

“'Pag ginawa mo ‘yang extension ng 25 years baka bababa pa yan. In the renegotiation, if the extension will be longer, then bababa ang rates. From P25 in Manila Water, baka magiging P15 na lang yan,” he said. —Joviland Rita/LBG, GMA News