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Water deals bedevil Duterte

DOJ ordered to draw up new contracts; Ayala firm seeks ‘workable solution’

Saying water concessionaires are “hell-bent on bleeding Filipinos dry,” President Rodrigo Duterte has ordered the Department of Justice to prepare new contracts and file raps against Manila Water and Maynilad and government officials who entered into deals with them.

The President has asked the DOJ, along with the Office of the Solicitor General, to draft and prepare new “covenants that are favorable to the state and the Filipino people,” Presidential Spokesman Salvador Panelo said Wednesday.

President Duterte has also directed the filing of criminal, civil and administrative charges against all those involved in the contracts with the utility firms, including their owners and legal counsels, as well as agents and lawyers of the government for “economic sabotage,” Panelo said.

This came after Duterte expressed his outrage over the decision of the Singapore-based Permanent Court of Arbitration directing the government to pay Manila Water P7.4 billion due to rejected water rate hikes back in 2015.

Manila Water cited details of its concession agreement with the Metropolitan Waterworks and Sewerage Systems in 1997, which carried a provision that pushes the government to indemnify the utility firm against any loss that could result from the regulator’s actions.

As a regulator, the MWSS approves or rejects petitions for water rate adjustments.

The ruling comes almost three years after the PCA ruled on a similar case filed by west zone concessionaire Maynilad. The court had ordered the state to reimburse P3.4 billion for Maynilad’s losses from March 2015 to August 2016.

“It is apparent that some members of the government have not only looked the other way, but have in fact purposely guided the hands of those who have raped our economy for their own personal aggrandisement,” Panelo said.

“Worse, they are hell-bent on bleeding our country dry. The proper delivery of basic services has not been fostered but thwarted to the outrageous detriment of the Filipinos,” the Palace official added.

Panelo, who also serves as Duterte’s chief legal counsel, noted that under the Constitution, all-natural resources of the Philippines, including water, are owned by the state.

He said utility firms had treated water as a “commodity and a money-making venture, instead of considering it as a public service.”

Panelo also said a review of the agreements with the Manila Water and Maynilad had revealed that these are contrary to public policy and interest.

Manila Water, on Wednesday, clarified that the arbitral award issued by the Permanent Court of Arbitration was for acts in breach of the procedure committed by officials of the previous administration.

The company also said it was confident that the decision by the court was above board.

The company had previously conferred with the Finance department for guidance upon receipt of the news.

Manila Water informed the department of a plan on how to implement the arbitral award “considering that this case was filed due to a violation incurred not during this administration.”

“We wish to reiterate that Manila Water is more than willing and have started to work with the incumbent administration to come up with a workable solution to the arbitration decision,” the company said in a statement.

The concession agreement contains a procedure for the adjustment of water rates in accordance with the MWSS Charter,the company said. The government undertook to respect the procedure, which is under the full control of MWSS.

The company said it has spent over P157 billion to improve water and wastewater services. It has installed over 5,500 kilometers of pipes and built two new filter plants, 32 new reservoirs, 113 pumping and booster stations, 40 additional wastewater treatment facilities and five times more sewer network capacity to improve the MWSS facilities in the East Zone.

This resulted in the expansion of water service coverage in the East Zone from 67 percent coverage serving around three-million people to 93-percent coverage serving over seven million people, the company added.

Also on Wednesday, Senate Minority Leader Franklin Drilon denied he was among those who drafted the “onerous” concession agreements between the government and Manila Water Co. and Maynilad Water Services signed in 1997.

“I did not in any manner participate in the drafting of the concession agreement,” Drilon said in response to the question raised by Duterte.

The President said he remembered Drilon warned the government against “tinkering” with the contracts, saying that the government will end up paying so many billions of pesos.

Duterte also told the opposition leader that if he goes down, he will drag Drilon with him.

Senate President Pro Tempore Ralph Recto also said the senators were not part of crafting any agreement with water concessionaires then and now.

Senate President Vicente Sotto III said he supported the President’s move to review all government contracts.

“After hearing his explanation last night on how we are being taken for a ride by these concessionaires, I told him I’m supporting him 100 percent on the issue,” said Sotto.

But Drilon warned that “existing and binding contracts cannot simply be classified as onerous and canceled” although he was in favor of the review of all contracts.

READ: ‘Extraordinary powers’ for Duterte vs. water crisis

READ: Duterte floats plan to take over water concessionaires

READ: Rody vows to avoid water crisis amid service rotation

Topics: Rodrigo Duterte , Manila Water , Maynilad , Salvador Panelo , Metropolitan Waterworks and Sewerage Systems
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