The government will offer the two private water distributors new concession agreements, but if they reject the new deal, it will cancel their contracts, nationalize water services and sue them, the Palace said Tuesday.
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“There is a time for reckoning. That time has come,” said Presidential Spokesman Salvador Panelo.
“Should Maynilad and Manila Water refuse to accept the new agreements, the Chief Executive will order the cancellation of their present water contracts, mandate the nationalization of water services in their respective areas of operation and prosecute all those involved, directly or indirectly, in the arrangement that led to the present suffering of the Filipino people.
But Justice Secretary Menardo Guevarra said the new contracts may still be discussed and negotiated.
“There will be a process of discussion and renegotiation. It’s not a 100 percent take it or leave it thing. We are reasonable in so far as this matter is concerned,” Guevarra said in an interview over radio dzMM.
He said there is no consolidated draft of the new contracts yet, but said his department is giving the matter a “high priority.”
“The inputs on the financial aspect will have to be discussed further and integrated later,” Guevarra said.
The Department of Justice and the Office of the Solicitor General previously reviewed the 1997 water concession deal with Maynilad and Manila Water and found unfair provisions in the deal which “violated every prohibited act in the anti-graft law.”
Metro Pacific-led Maynilad said it has yet to receive a copy of the amended contract, but said it reassured the President of its “continuing cooperation.”
Ayala-led Manila Water has not issued a statement yet.
“The Filipinos have lost enormously with the unabated collections by these concessionaires despite the latter’s dismal performance in supplying, delivering and distributing water,” Panelo said.
The President said it is up to the two companies if they will accept the new contracts.
“That’s not my problem… I have this draft, it’s either you accept it or not. You do not accept it? Then there is no contract,” he said in a chance interview with reporters.
Asked if there was a deadline for the two companies, Duterte said he is “not hurrying them up.”
He also maintained his position that he would not recognize the ruling of the Singapore-based tribunal that ordered the Philippines to pay Maynilad P3.4 billion and Manila Water P7.4 billion after the two companies took the government to court for not allowing them to raise their rates.
“I am not going to pay anything. Not a single cent… they will not get anything from me,” Duterte said.
He also said the 1997 water deal was void from the beginning.
“For after all, as I have said right at the beginning when I saw the contract, I said this document is null and void from the beginning because it has so many provisions that would infringe into the penal laws of the Philippines, particularly the Anti-Graft and Corrupt Practices Act,” he said.
Guevarra said Manila Water and Maynilad will be given the opportunity to renegotiate the new water concession agreements with the government.
Duterte earlier warned Maynilad and Manila Water that they may face prosecution should they refuse to accept the new contracts.
Guevarra said the new contracts may be available after six months since they need inputs from the Department of Finance on issues pertaining to economic and financial provisions.
The Justice secretary said they have already removed the so-called onerous provisions, with includes a bar on government interference in the rate-setting mechanism of the water concessionaires, as well as the inclusion of business taxes in the setting of water rates.
Earlier, Duterte threatened to file syndicated estafa charges against the owners of the two water companies over the supposedly onerous provisions in their current contracts.
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