Business tycoon Manny V. Pangilinan said on Thursday that President Rodrigo Duterte’s order to review government contracts could set a negative precedent for future deals between the government and private corporations
Pangilinan made the assertion following Duterte’s order to the Solicitor General and the Department of Justice to review all contracts entered into by the government.
The order came after the Palace said that officials of the Maynilad Water Services Inc. who negotiated for the concession agreement with the government, may still be held accountable amid plans by the firm to drop its arbitration proceedings against the state.
Maynilad is one of the companies owned by Pangilinan.
Presidential Spokesman Salvador Panelo said the Palace is leaving it to the Justice department to determine whether or not the water concessionaire violated its contract with the government.
Justice Secretary Menardo Guevarra said Duterte was no happy with the provision in the contract that says that if the Philippine government interferes in any manner that would reduce or delay the implementation of agreed water rates, the government will indemnify the company for any losses.
In 2017, the Philippine government was ordered by an international tribunal in 2017 to pay Maynilad after it won a P3.44-billion indemnity claim.
Pangilinan, who chairs Maynilad, insists that the same terms were also included in the concession agreement of Manila Water Company Inc. which recently experienced a shortage in its water supply.
“Well, those provisions are the same for both concessionaires, alam naman nila ‘yun eh,” Pangilinan said. “It’s stipulated on the contractual arrangements, so that was the right given to us in the contract so we exercised it.”
Earlier, the business tycoon said that the company was willing to drop the arbitration case provided that both parties come to terms on the tariff issue.
Meanwhile, Senator Franklin Drilon also warned the government should exercise caution in reviewing the contract with Maynilad.