Gov’t can ignore extended concession deal with Manila Water, Maynilad – Pimentel

Published December 9, 2019, 5:14 PM

by Martin Sadongdong & Antonio Colina

By Mario Casayuran 

Senator Aquilino Pimentel III on Monday said the Duterte administration can disregard the extended life of the concession agreement signed by Manila Water and Maynilad since the extension, signed during the Arroyo administration, was done in the middle of the life of the original contract that is scheduled to expire in 2022.

Senator Aquilino Pimentel III (Senate of the Philippines / MANILA BULLETIN)
Senator Aquilino Pimentel III
(SENATE OF THE PHILIPPINES / FILE PHOTO / MANILA BULLETIN)

Pimentel, a bar topnotcher, said the Arroyo administration could not tie the hands of President Duterte when it extended the life of the two water concession contracts up to 2037.

The senator, however, did not disclose any basis why the govern­ment can disregard the deal agree­ment to extend the concession deal until 2037.

“We are still under the regime of the original contract,” Pimentel said, without elaborating.

Since a suit against the present concessionaires may take years be­fore it could be settled, the Duterte administration can now begin draft­ing strict terms of a contract for new bidders, including Maynilad and Ma­nila Water, to be bid out in 2022.

Pimentel, a bar topnotcher, said the search for new concessionaires would begin in 2020, 2021, 2022 “and announce early the terms of the new concession agreement including standards, fees, etc, the mechanics, arrangement, grievance procedure, announce early then open up the application or the search for the new concessionaires.”

Earlier, Maynilad and Manila Water appealed the P2-billion fines imposed against them by the Su­preme Court for violating the Clean Water Act.

Maynilad had warned of chaotic traffic and high water rates if the High Tribunal would not reconsider its ruling.

It maintained that it would be “legally and physical impossible” to comply with the Supreme Court’s di­rective to provide wastewater treat­ment facilities and to connect sewage lines in all establishments, including households a sewerage system within a five-year period.

Through its lawyers, Maynilad asked the SC to set aside its August decision directing it, along with Manila Water, to pay the P2-billion fine for violation of a provision of Republic Act 9275 or the Philippine Clean Water Act.

The said provision requires MWSS and the two concessionaires to pro­vide wastewater treatment facilities and to connect sewage lines in all es­tablishments, including households, to an available sewerage system within five years upon the effectivity of RA 9275 on March 6, 2004.

President Duterte had earlier ordered the Justice department and Office of the Solicitor General to craft new water concession agree­ments more “favorable” to the public compared to the current deals with Manila Water and Maynilad.

Duterte also ordered the filing of criminal, civil, and administrative charges against “all those involved” in the concession agreements of Manila Water and Maynilad with the Metropolitan Waterworks and Sew­erage System (MWSS), a government corporation.

The charges would cover the owners of the water concessionaires, their “agents,” and even government lawyers who helped craft the alleged one-sided deals.

“It is apparent that some mem­bers of the government have not only looked the other way, but have in fact purposely guided the hands of those who have raped our economy for their own personal aggrandizement,” Malacañang spokesman Salvador Panelo said recently.

Ready for takeover

Meanwhile, Justice Secretary Me­nardo Guevarra has assured that the government is ready to take over the water supply duties for Metro Manila in the event the two water conces­sionaires decide halt its services.

“The government will have to take over if necessary,” he told re­porters as the government is dead set to revise its current deals with water concessionaires Manila Water and Maynilad.

But Guevarra doesn’t believe that the situation will reach the point where the government will take over the water supply services for the metro.

“This is a problem that can be solved. I don’t have any reason to believe that we should be worried of stoppage of water supply,” he assured.

“Unless and until the government is ready to efficiently run the distri­bution business, I guess for now, we still have to rely on private conces­sionaires for the distribution of water supply,” he pointed out.

The government has sought to revise its deals with the two water concessionaires after the Department of Justice (DOJ) found at least a dozen onerous provisions in the 1997 water concession agreements.

The agreement itself marami na­mang okay na provisions (there are many okay provisions). It’s just a mat­ter of weeding out yung mga provisions which can be considered as onerous or highly disadvantageous,” he noted.

He disclosed that a team will draft a new version of the concession agree­ment. The team will be composed of lawyers from the DOJ, Department of Finance (DOF), Office of the Solicitor General (OSG), and Office of the Govern­ment Corporate Counsel (OGCC).

“So we’ll hopefully come up with a revised version of the water concession agreement that does not include the onerous and what is considered illegal provisions,” he said.

“Once we are ready with our own version of what a good water concession agreement should be, that’s the time we will sit down with the water concession­aires,” he added.

Guevarra also said that the OSG is looking for remedies to address the ruling of the Permanent Court of Arbi­tration in Singapore in favor of Manila Water which ordered the Philippine government to pay the company P7.39 billion, which represent losses from June 1, 2015 to November 22, 2019 when the water concessionaire was not allowed to have water price hikes.

Guevarra said that the OSG is looking into the possibility of appealing the rul­ing before the Singapore high court.

“Ang mas mahalaga kasi (what is more important) is not how to deal with their decision but what is more impor­tant is how we deal with the concession agreement itself,” he pointed out. (With a report from Jeffrey Damicog)

READ MORE: DOJ: Gov’t ready to run water supply if water concessionaires bail

 
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Gov’t can ignore extended concession deal with Manila Water, Maynilad – Pimentel

Published December 9, 2019, 12:00 AM

by manilabulletin_admin

By Mario Casayuran 

Senator Aquilino Pimentel III on Monday said the Duterte administration can disregard the extended life of the concession agreement signed by Manila Water and Maynilad since the extension, signed during the Arroyo administration, was done in the middle of the life of the original contract that is scheduled to expire in 2022.

Senator Aquilino Pimentel III (Senate of the Philippines / MANILA BULLETIN)
Senator Aquilino Pimentel III
(SENATE OF THE PHILIPPINES / FILE PHOTO / MANILA BULLETIN)

Pimentel, a bar topnotcher, said the Arroyo administration could not tie the hands of President Duterte when it extended the life of the two water concession contracts up to 2037.

The senator, however, did not disclose any basis why the govern­ment can disregard the deal agree­ment to extend the concession deal until 2037.

“We are still under the regime of the original contract,” Pimentel said, without elaborating.

Since a suit against the present concessionaires may take years be­fore it could be settled, the Duterte administration can now begin draft­ing strict terms of a contract for new bidders, including Maynilad and Ma­nila Water, to be bid out in 2022.

Pimentel, a bar topnotcher, said the search for new concessionaires would begin in 2020, 2021, 2022 “and announce early the terms of the new concession agreement including standards, fees, etc, the mechanics, arrangement, grievance procedure, announce early then open up the application or the search for the new concessionaires.”

Earlier, Maynilad and Manila Water appealed the P2-billion fines imposed against them by the Su­preme Court for violating the Clean Water Act.

Maynilad had warned of chaotic traffic and high water rates if the High Tribunal would not reconsider its ruling.

It maintained that it would be “legally and physical impossible” to comply with the Supreme Court’s di­rective to provide wastewater treat­ment facilities and to connect sewage lines in all establishments, including households a sewerage system within a five-year period.

Through its lawyers, Maynilad asked the SC to set aside its August decision directing it, along with Manila Water, to pay the P2-billion fine for violation of a provision of Republic Act 9275 or the Philippine Clean Water Act.

The said provision requires MWSS and the two concessionaires to pro­vide wastewater treatment facilities and to connect sewage lines in all es­tablishments, including households, to an available sewerage system within five years upon the effectivity of RA 9275 on March 6, 2004.

President Duterte had earlier ordered the Justice department and Office of the Solicitor General to craft new water concession agree­ments more “favorable” to the public compared to the current deals with Manila Water and Maynilad.

Duterte also ordered the filing of criminal, civil, and administrative charges against “all those involved” in the concession agreements of Manila Water and Maynilad with the Metropolitan Waterworks and Sew­erage System (MWSS), a government corporation.

The charges would cover the owners of the water concessionaires, their “agents,” and even government lawyers who helped craft the alleged one-sided deals.

“It is apparent that some mem­bers of the government have not only looked the other way, but have in fact purposely guided the hands of those who have raped our economy for their own personal aggrandizement,” Malacañang spokesman Salvador Panelo said recently.

Ready for takeover

Meanwhile, Justice Secretary Me­nardo Guevarra has assured that the government is ready to take over the water supply duties for Metro Manila in the event the two water conces­sionaires decide halt its services.

“The government will have to take over if necessary,” he told re­porters as the government is dead set to revise its current deals with water concessionaires Manila Water and Maynilad.

But Guevarra doesn’t believe that the situation will reach the point where the government will take over the water supply services for the metro.

“This is a problem that can be solved. I don’t have any reason to believe that we should be worried of stoppage of water supply,” he assured.

“Unless and until the government is ready to efficiently run the distri­bution business, I guess for now, we still have to rely on private conces­sionaires for the distribution of water supply,” he pointed out.

The government has sought to revise its deals with the two water concessionaires after the Department of Justice (DOJ) found at least a dozen onerous provisions in the 1997 water concession agreements.

The agreement itself marami na­mang okay na provisions (there are many okay provisions). It’s just a mat­ter of weeding out yung mga provisions which can be considered as onerous or highly disadvantageous,” he noted.

He disclosed that a team will draft a new version of the concession agree­ment. The team will be composed of lawyers from the DOJ, Department of Finance (DOF), Office of the Solicitor General (OSG), and Office of the Govern­ment Corporate Counsel (OGCC).

“So we’ll hopefully come up with a revised version of the water concession agreement that does not include the onerous and what is considered illegal provisions,” he said.

“Once we are ready with our own version of what a good water concession agreement should be, that’s the time we will sit down with the water concession­aires,” he added.

Guevarra also said that the OSG is looking for remedies to address the ruling of the Permanent Court of Arbi­tration in Singapore in favor of Manila Water which ordered the Philippine government to pay the company P7.39 billion, which represent losses from June 1, 2015 to November 22, 2019 when the water concessionaire was not allowed to have water price hikes.

Guevarra said that the OSG is looking into the possibility of appealing the rul­ing before the Singapore high court.

“Ang mas mahalaga kasi (what is more important) is not how to deal with their decision but what is more impor­tant is how we deal with the concession agreement itself,” he pointed out. (With a report from Jeffrey Damicog)

READ MORE: DOJ: Gov’t ready to run water supply if water concessionaires bail

 
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