Two concessionaires supplying water to Metro Manila on Tuesday said they would no longer collect nearly P11 billion in arbitration awards from the Philippine government, after President Rodrigo Duterte threatened to sue them for economic sabotage.
The presidents of Ayala-owned Manila Water Co. and the Manuel Pangilinan-led Maynilad Water Services Inc. told lawmakers in a congressional hearing they would no longer pursue the claims, which were supposed to cover losses they claim to have incurred after water rates were frozen way back in 2015.
Manila Water stocks dropped more than 5 percent to P14.50 apiece on Tuesday. Maynilad, a joint venture between Metro Pacific Investments Corp. and DMCI of the Consunji family, is not listed on the stock exchange.
Manila Water, which supplies water to the east zone of Metro Manila, announced its victory at the Permanent Court of Arbitration in Singapore in November, saying the government must pay P7.39 billion for “breach of obligation” and other costs.
West zone concessionaire Maynilad won a separate award worth P3.4 billion in 2017.
Duterte argues that the concession contracts awarded to Manila Water and Maynilad in 1997 were onerous as the deals allowed the two firms to charge their income tax payments on consumers, as well as guaranteed their profits. Water, he also argues, was treated as a commodity and not a natural resource owned by the state.
He also said Manila Water and Maynilad also breached their obligations for failing to put up sewerage and water treatment facilities.
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The president on Tuesday threatened to take back the concessions if the government lawyers under the Metropolitan Waterworks and Sewerage System (MWSS) who drafted the concession agreements did not make satisfactory explanations.
“Isa-isahin ko sila. Ang abugado ng mga p***** i** gumawa ng kontrata. Sino ‘yung mga opisyal ng MWSS noon? Tanungin ko sila. What the f*** did you do and screwed the country? Ngayon, ‘pag hindi ako ma-satisfy, I will expropriate everything. Kunin ko lahat,” he said in remarks during oath-taking ceremonies of uniformed government personnel in Malacañan Palace.
“Magdemanda ka nang magdemanda. Tutal dalawang taon lang naman tapos wala na ako,” he added.
Manila Water defended its record in a statement on Dec. 4, saying it “diligently discharged its obligations as concessionaire of MWSS, spending over Php 166 billion to improve water and wastewater services.”
“We have installed over 5,500 kilometers of pipes and built 2 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,” it said.
“This resulted in the expansion of water service coverage in the East Zone from 67% coverage serving around three million people to 93% coverage serving over seven million people. This includes an additional 2 million customers from the poor and marginalized sector, who used to buy vended water in buckets or pails delivered by vendors in pushcarts. Manila Water services allowed them to save about 90% of what they used to pay for water. We also reduced water losses from 63% to less than 12%, saving 700 million liters per day of water,” it added.
Manila Water also pointed out that “The arbitral award issued in our favor is for acts in breach of the procedure committed by officials of the previous administration, not the Duterte 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,” it said. (PressONE.ph)