Rody hits Noy, Gloria

Over ‘plunderous’ water contracts

President Rodrigo Duterte on Monday took a swipe at former Presidents Gloria Macapagal Arroyo and Benigno Aquino III, saying they allowed the country’s Constitution to be bargained away over the “plunderous” agreements with water concessionaires.

The water firms, he said, should also be afraid because the government contract with them violated the Anti-Graft Law.

“I cannot imagine two administrations allowing our Constitution to be bargained away,” President Duterte said in a speech in Malacañang before police and military men, as he lashed out anew at Maynilad and Manila Water.

In the Senate, Senator Francis Tolentino asked the Senate to investigate the apparent “onerous” contracts executed between the Philippine government and the water concessionaires.

In a privilege speech, Tolentino said the probe was urgent since,  over the weekend, reports suggested Manila Water and Maynilad are seeking approval for yet again another water rate increase to be implemented in the first quarter of 2020. 

On weekend, reports suggested Manila Water and Maynilad are seeking approval for yet again another water rate increase to be implemented in the first quarter of 2020. 

He said the rate increase pertains to the Foreign Currency Differential Adjustment which allows the concessionaires to recover or compensate for fluctuations in foreign exchange rates. 

Also alarming, he noted, are the decreasing water levels in Angat Dam, which supplies 98 percent of Metro Manila’s needs.

This had reached the critical level of 160 meters this year. 

At the same time, the Department of Justice gave assurances there would be no water service interruption in Metro Manila even if there was a looming legal tussle between the government and the two water concessionaires over what Duterte described as “onerous” and “grossly disadvantageous” provisions in the 1997 water concession agreement.

Justice Secretary Menardo Guevarra said the government was now preparing legal approaches to challenge a ruling rendered by Permanent Court of Arbitration in Singapore ordering the Philippine government to compensate the Manila Water Company P7.4 billion and Maynilad Water Services Inc. P3.6 billion purportedly representing their supposed losses for not having been allowed to raise water rates.

“If they will stop the water supply, the government will have to take over, deal with it. But I don’t think we will get to that point. There will be no stoppage of water supply,” Guevarra said in an interview.

“It does not mean that it can be enforced at any given time. The government is ready to oppose any enforcement of that because it is against public policy,” he added.

The priority is to revise the concession agreements entered into by the state-run Metropolitan Waterworks and Sewerage System and the concessionaires, not the arbitral rulings, he said.

“This problem can be solved. We just have to weed out provisions disadvantageous to the government,” Guevarra said.

Tolentino said it was a sharp decline from the normal high operating level of 212 meters and the 180 minimum operating level.

The crux of the matter, the senator said,  lies in the Concession Agreements and Letters of Undertaking between the MWSS and Maynilad and Manila Water.

As having the force of law between the parties, he said the Concession Agreements governed the relations between the state regulator and the water concessionaires and provides for their rights and obligations as they maintain the country’s water and sewerage system.

Duterte also said he wanted to talk with government lawyers who crafted the 1997 deal with the two utility firms which distribute water in Metro Manila and nearby provinces under agreements signed with the Metropolitan Waterworks and Sewerage System.

“I want to talk to them. It cannot be fixed until I talked to the concessionaires. I want to talk with government lawyers who were sons of a bitch in crafting this deal,” he said.

The deal was signed during the Ramos administration and a review by the Department of Justice revealed “onerous” provisions were stipulated in it.

The agreement carried a provision that says the government should “indemnify” the company against any loss that could result from the regulator’s actions that is the MWSS. 

“The contract itself is a mirror of the Anti-Graft and Corrupt Practices Law. They should be really afraid,” he said.

The Permanent Court of Arbitration has directed the government to pay the Ayala-owned Manila Water with P7.4 billion and Pangilinan-led Maynilad with P3.4 billion for their respective losses since the state did not allow the firms to increase prices years ago.

“How will I compromise? That’s classic economic plunder,” he asked.

According to Tolentino, the water concessionaires’ corporate greed was the reason for the current water crisis. 

He said the water crisis had affected not only the national economy or the productivity of students, workers and everyone in society but it ultimately puts the health of the people, especially children, at serious risk and threatens the country’s attainment of sustainable development.

He cited the findings of the WHO that the Philippines, around one in 10 people do not have access to improved water resources.

As stated in a study conducted by Water.Org, out of 105 million Filipinos, nearly seven million rely on unimproved, unsafe and unsustainable water sources and more than 24 million lack access to improved sanitation. 

With the current water crisis, people are more vulnerable to water-related diseases, such as diarrhea, dengue fever and intestinal worms, as they search for alternative sources of water, thus increasing the risk of diseases as these may be unsafe and unsanitary.

Meanwhile, Senator Christopher “Bong” Go urged the MWSS to explore the possibility of terminating the extension of the concessionaire agreement. “The President might also ask that you do this eventually.”

He also expressed his belief to renegotiate and rework these contracts to: (1) eliminate or neutralize those provisions which are unduly disadvantageous to the government; and (2) align both governmental and private interests to one common goal:  public interest. 

He emphasized at our government and the people are now at the mercy of these big private concessionaires.  

“It is apparent that many of the provisions in the concessionaire agreements are unfair and unjust to the Filipino people,” said Go. 

Furthermore, Go said these water concessionaires should also be charged not only for failing to deliver to the terms of their contract but also for the billions―if not trillions―worth of environmental damage caused by their failure to construct a sewerage and wastewater system. 

“This is aside from the almost 1 billion pesos worth of fines that they were told to pay by the Supreme Court last August 2019 because of violations in relation to the Philippine Clean Water Act,” he added.

The DOJ chief warned that if the concessionaires rejected the amendments to the 1997 water concession to weed out its onerous and disadvantageous provisions, the government would be forced to take appropriate legal action.

“If the concessionaires do not accept the amendments to be proposed by the government will be compelled to take legal action,” Guevarra said.

Guevarra stressed that the government wanted the water concessionaires to agree to the proposed amendments by the government, otherwise the government will seek for the rescission of the agreement.

The Justice secretary debunked insinuation that the Duterte administration wants new concessionaires to take over the operations of Maynilad and Manila Water.

“It’s only when the courts order the rescission of the water concession agreements that the government may open the field to competition unless the government itself can take over actual operations, which is rather unlikely,” Guevarra pointed out.

READ: Duterte eases off on water firms, offers to fix contract

READ: ‘Sovereignty lost in water deal’

Topics: Rodrigo Duterte , Gloria Macapagal Arroyo , Benigno Aquino III , Anti-Graft Law , Francis Tolentino
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