Gov't to take legal action vs. Maynilad, Manila Water if 'onerous' provisions not removed —DOJ

The government will be forced to take legal action against the two water concessionaires if they will not agree to remove the supposedly "illegal" and "onerous" provisions in its concession agreement with them, the Department of Justice (DOJ) said Sunday.

In an interview on Dobol B sa News TV aired on GMA News TV, DOJ spokesperson Undersecretary Markk Perete said Maynilad and Manila Water have agreed to sit down and discuss with the government the supposedly disadvantageous provisions.

"We hope na it can be mutually agreed upon by the parties but otherwise... 'yung DOJ, OSG (Office of the Solicitor General), Department of Finance and many other agencies have drawn up a number of steps to take to address this problem," he said.

"Whether ang maging kakalabasan ay mag-agree 'yung concessionaires doon sa removal ng provisions na ito, o kung hindi naman, meron din naman tayong pinaghahandaan in court or outside the court," he added.

On Tuesday last week, President Rodrigo Duterte threatened to run after individuals responsible over the supposed disadvantageous concession agreements entered by the government with Maynilad and Manila Water.

The President protested a provision in the contracts that if the government interferes in the implementation of agreed water rates, the state will indemnify the utility company for any losses suffered.

An international tribunal recently ordered the Philippine government to pay Maynilad Water Services Inc. P3.424 billion in revenue losses from unimplemented rate adjustments.

Duterte on Thursday continued his criticism of the concession agreements that the government entered with Maynilad and Manila Water during the Ramos administration.

He reacted negatively to the arbitration rulings hours after his spokesperson Salvador Panelo said the government would not pay Maynilad and Manila Water despite rulings by an arbitration court in Singapore.

Justice Secretary Menardo Guevarra said the provisions were the reasons why the government was ordered by an arbitration court in Singapore to pay Manny Pangilinan-led Maynilad P3.6 billion and Ayala-owned Manila Water P7.4 billion as compensation for losses or damages.

The President maintained that the people behind the contracts should be held liable for economic sabotage.

Perete on Sunday said that according to DOJ evaluation, such a provision is not proper as under Republic Act 6234, or the law that creates the Metropolitan Waterworks and Sewerage System, only the MWSS board of trustees can set the water rates.

At the same time, only the National Water Resources Board can determine whether the water rates that the MWSS has set were reasonable.

"'Yung usapan the last time was to re-negotiate these provisions. Kailangan pag-usapan ng mga concessionaires at ng gobyerno 'yung possibility of expunging sa concession agreement 'yung illegal and onerous provisions na nakapaloob doon," Perete said.

Maynilad President and CEO Ramoncito Fernandez has earlier said the firm is willing to sit down with government for a concession review. —Erwin Colcol/KG, GMA News