Military may run water firms

President Rodrigo Duterte warned private water concessionaires Thursday night that he would order the military to take over their operations and throw executives of Maynilad and Manila Water in jail as economic saboteurs over onerous provisions in their service contracts with the government.

“Don’t fool me and say that, ‘We will leave and you will lose water.’ I will order the Armed Forces to operate your water,” he said during a party of former Senator Manny Villar Thursday evening.

“Then I will declare the suspension of the writ of habeas corpus but only against economic saboteurs...and I will arrest all of you, for I want to see a billionaire in jail,” he added.

On Friday, the Palace blasted the two concessionaires for saying their rates would rise 100 percent if the government insisted on revoking the extension of their concession agreements.

In a statement, Presidential Spokesperson Salvador Panelo slammed the two companies for recanting on their earlier pledge to President Duterte to defer the implementation of their approved increase in water rates in January 2020.

Next month, Maynilad is scheduled to increase water rates by P1.95 per cubic meter, while Manila Water is slated to raise its base tariff by P2 per cubic meter.

Panelo said Manila Water and Maynilad apparently do not care about the plight of water consumers.

“We note that the two Metro Manila water concessionaires, Maynilad and Manila Water, have threatened to increase the water rates by 100 percent, following the decision of the MWSS [the Metropolitan Waterworks and Sewerage System] revoking the extension of their concession agreements,” he said.

Manila Water and Maynilad wrote separate letters to Duterte on Dec. 10, expressing their willingness to make amends following threats of facing charges of economic sabotage and even expropriation from the President.

“We recall that they offered not to implement the approved new water rates, among others, after the President publicly denounced the onerous provisions of the said contracts. These concessionaires can do their worst and continue with fleecing the consumers while the President will do his best in serving and protecting the interest of the people,” Panelo said.

Duterte has repeatedly claimed that the government’s concession agreements with the two water concessionaires contain “onerous” provisions that are disadvantageous to the public.

He has been lambasting the two companies after the Permanent Court of Arbitration in Singapore ordered the Philippine government to pay Manila Water P7.39 billion for the non-implementation of water hikes from June 1, 2015 to Nov. 22, 2019.

The PCA also upheld its October 2018 ruling ordering the Philippine government to pay P3.4 billion for Maynilad’s losses from March 11, 2015 to Aug. 31, 2016.

Duterte has ordered the filing of appropriate criminal, civil, and administrative charges against the owners and legal counsels of Manila Water and Maynilad, as well as the agents and lawyers of the government agenciess involved in the crafting of the water concession deals.

Duterte’s actions prompted Manila Water and Maynilad to send him a letter, signifying their intent to cooperate with the government to settle the issue.

Panelo on Friday released the letters, which are still under review by the Chief Executive, “for the sake of transparency.”

Manila Water chairman Fernando Zobel de Ayala, in his letter, relayed to Duterte his company’s decision not to collect the P7.39 billion it won in an arbitration case against the government.

Zobel also assured the President that Manila Water informed state water regulator MWSS on Dec. 3 of its plan to “work out an arrangement that will effectively defer the implementation of the approved water charge.”

He also noted that Manila Water has agreed to “immediately start with the discussions and expedite the negotiations” with regard to its supposed “illegal, onerous or disadvantageous” agreement with the government.

“Mr. President, we heed your call to revisit and renegotiate certain provisions of the concession agreement. We fully share your mandate to put the interest of the people as the primary objective,” Zobel’s letter read. “We will work closely with the proper government agency to make sure that the P7.39-billion arbitral award will not have to be paid by the government directly or through the customers.”

Meanwhile, Maynilad chairman Manuel Pangilinan and president and chief executive officer Ramoncito Fernandez assured the President that they would cooperate with MWSS in reviewing and possibly amending the concession agreement.

Pangilinan and Fernandez guaranteed that just like the President, their desire is to also “provide our people access to water and wastewater services at affordable rates.”

Despite this, the MWSS announced on Tuesday that it has revoked the resolution extending by 15 years the 25-year concession agreements with Manila Water and Maynilad signed in 1997 during the leadership of then-President Fidel Ramos. This would mean their roles as concessionaires would end in 2022 unless their agreements are renewed.

An MWSS resolution in 2009 extended their contracts to 2037, but the same agency revoked the extension this month, after the President’s order to have the agreements reviewed.

Panelo said the water concession pacts with Manila Water and Maynilad “violate every prohibited act of the law.”

“All legal options are open to him (Duterte),” Panelo said, adding that Duterte would not be swayed by nor enticed into the proposed settlements by Manila Water and Maynilad.

“The concessionaires are put on notice that the Chief Executive will not renege from his constitutional duty of enforcing the law. Neither will he be swayed (by) nor enticed into accepting a compromise. Dura lex sed lex (The law is harsh but it is the law),” he said.

Panelo noted that water is a natural resource and the people’s access to it is a basic human right and is constitutionally protected as well.

The Department of Justice, meanwhile, justified the MWSS move to revoke the extension of their concession agreements.

Justice Undersecretary Marrk Perete said the MWSS’ decision to cancel its earlier extension of its concession agreements with the two water concessionaires does need approval from a court.

“The burden of taking action based on an interpretation of the contract is assumed by the executive. In assuming that burden, it need not obtain prior court approval,” Perete said.

“Take note the proper time to renew the contract is upon the expiration of the concession agreement in 2022, as expressly provided in the agreements themselves,” Justice Secretary Menardo Guevarra said.

Guevarra, meanwhile, asked Justice Undersecretary Emmeline Aglipay-Villar to inhibit herself from participating in the ongoing review of the government’s water concession agreements to remove suspicions of a vested interest.

Villar, a former congresswoman, is the wife of Public Works Secretary Mark Villar and the daughter-in-law of Senator Cynthia Villar and businessman Manny Villar.

The Villar family owns the water utility PrimeWater Infrastructure Corp., which is headed by Senator Villar’s eldest son, Manuel Paolo Villar.

The undersecretary on Friday said she would inhibit herself from participating in the review.

“To eliminate any cloud of doubt on the impartiality of the department’s review and renegotiation of the water concession agreements with (MWSS)… I am inhibiting (myself) from any involvement in the department’s review and renegotiation of the said agreements,” she said in a memo to Guevarra. With Julito G. Rada and PNA

READ: Water companies face Senate wringer

READ: ‘Sovereignty lost in water deal’

READ: Rody vows to avoid water crisis amid service rotation

Topics: Rodrigo Duterte , Maynilad , Manila Water , Armed Forces of the Philippines
COMMENT DISCLAIMER: Reader comments posted on this Web site are not in any way endorsed by Manila Standard. Comments are views by readers who exercise their right to free expression and they do not necessarily represent or reflect the position or viewpoint of While reserving this publication’s right to delete comments that are deemed offensive, indecent or inconsistent with Manila Standard editorial standards, Manila Standard may not be held liable for any false information posted by readers in this comments section.
AdvertisementSpeaker GMA