Duterte eases off on water firms, offers to fix contract

The government is willing to negotiate with Manila Water and Maynilad to resolve the “onerous” provisions in the 1997 water deal between the government and the two private utility companies, Malacañang said Sunday.

READ: ‘Sovereignty lost in water deal’

This was in sharp contrast to its earlier pronouncement that President Rodrigo Duterte had the constitutional power to revoke the government’s contracts with the water concessionaires.

“What the President says is fix the contract because it is wrong. In other words, negotiations. If they will agree, then there’s no problem. If no, they will be sued,” Presidential Spokesman Salvador Panelo said in a radio interview.

Panelo said that the President made no mention of rescinding the water deals after San Beda Graduate School of Law dean Fr. Ranhilio Aquino had said that cancellation of contracts must undergo a process in courts.

Maynilad and Manila Water distribute water in Metro Manila and nearby provinces under agreements signed with the Metropolitan Waterworks and Sewerage System (MWSS) during the Ramos administration, but a review by the Department of Justice revealed “onerous” provisions were stipulated in the deal.

President Duterte has earlier directed the Department of Justice to file charges against all those involved in the contracts with the utility firms, including their owners, legal counsels, and government lawyers for economic sabotage.

He also said the government would not comply with the ruling of the Permanent Court of Arbitration in Singapore ordering the government to pay Manila Water P7.39 billion and Maynilad with P3.4 billion for their respective losses as a result of their being unable to raise their prices.

The President was outraged by the ruling.

Maynilad President and CEO Ramoncito Fernandez earlier said the company is willing to sit down with government for a concession review, while Manila Water said it is working on a mutually acceptable manner for the implementation of the arbitral award.

Meanwhile, the MWSS said it initiated talks with the concessionaires for a postponement of water rate hikes which are supposed to be implemented by Jan. 1, 2020.

Panelo said the matter could be deferred if necessary.

READ: Rody vows to avoid water crisis amid service rotation

“Anything is possible. Anything can be discussed. They can discuss if they can defer it,” Panelo said.

Last week, Duterte asked the DOJ and Office of the Solicitor General to craft new water concession agreements that are “favorable to the state and the Filipino people.”

Businessman Manuel V. Pangilinan’s Metro Pacific Investments Corporation owns a controlling stake in Maynilad while Manila Water is a subsidiary of Ayala Corporation.

The Justice Department, meanwhile, said the two water concessionaires must be willing to remove the “grossly disadvantageous” provisions of their agreements or the government would take legal action against them.

“We hope na it can be mutually agreed upon by the parties but otherwise the 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,” said Justice Undersecretary Markk Perete in an interview over GMA News TV.

The Palace on Thursday slammed the arbitration rulings and said the government would not pay Maynilad and Manila Water despite rulings by the arbitration court in Singapore. With Macon Ramos-Araneta

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

READ: Duterte floats plan to take over water concessionaires

Topics: Rodrigo Duterte , Manila Water , Maynilad , Permanent Court of Arbitration , Ramoncito Fernandez , Manuel V Pangilinan , Metro Pacific Investments Corporation
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