DOJ: Water contracts violate existing laws, should be considered void

Published December 10, 2019, 4:57 PM

by Martin Sadongdong & Antonio Colina

By Jeffrey Damicog

The onerous provisions in the 1997 water concession agreements should be considered void for violating existing laws, Department of Justice (DOJ) spokesman and Undersecretary Markk Perete said Tuesday (Dec. 10).

Department of Justice (MANILA BULLETIN)
Department of Justice (MANILA BULLETIN)

“Fundamental ‘yung principle ng batas natin na (It is a fundamental principle in our laws that) if a contractual provision is violative of the law then that is a void provision,” Perete said in a radio interview over DZMM.

The spokesman added that under the Anti-Graft and Corrupt Practices Act the government cannot enter into contracts that are “grossly prejudicial to the government or to the best interest of the public.”

The spokesman said a DOJ panel of evaluators has already submitted to President Rodrigo Duterte a report concerning the provisions of the agreements considered to be onerous.

Among these burdensome provisions, Perete cited the non-interference clause which states that the government cannot interfere with the decisions of water concessionaires Manila Water Co., Inc. and Maynilad Water Services, Inc. in determining water prices.

The same provision also indicates that the water concessionaires should receive indemnification in the event the government bars any water price increase.

“That goes against both the MWSS (Metropolitan Waterworks and Sewerage System) law and the nature of the services of public utility,” Perete pointed out.

Under the MWSS law, the spokesman explained the MWSS board of trustees determines the water rates which are either approved or disapproved by the Water Resources Board.

He added that because water is a public utility, a company cannot have the sole determination of water prices because of the danger that they might be made unaffordable for consumers.

Perete said the deals also show that the water concessionaires were required to erect waste water treatment facilities and would be penalized if they failed to do so.

Perete pointed out that while the water concessionaires are being penalized for non-compliance with that provision, the companies can have consumers shoulder the penalties, based on the existing agreements.

“Yun talaga isa sa mga ikinagalit ng Pangulo, na hindi na nga nai-provide yung kanilang undertaking, kumbaga hindi na nga nila na-fulfill yung kanilang undertaking, ngayon na pine-penalize natin siya, ipapasa niya sa consumers ‘yung penalties na ‘yun by the provision of the concession agreement also (That’s one of the things the President is angry about, that the water concessionaires not only failed to deliver their undertakings, but now that they’re being penalized, they passed on the penalties to their consumers),” he explained.

The spokesman added that the President also sought to revoke the 2010 deal that allowed the two water concessionaires to extend the water concession agreements up to 2037.

Perete said the 1997 water concession agreements expire in 2022 and do not have any provisions for extensions.

“Walang provision yung concession agreement for extension. Nakalagay ho roon sa concession agreement is renewal (There is no provision for extension, only for renewal),” he stated.

The spokesman said that there were no changes in the provisions of agreements when the extensions were given back in 2010.

“Pinapa-revoke ng ating Pangulo on the grounds na ‘yung extension is not found in the concession agreement (The President is having the agreements revoked on the grounds that extension is not found in the concession agreements),” Perete said.

 
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DOJ: Water contracts violate existing laws, should be considered void

Published December 10, 2019, 12:00 AM

by manilabulletin_admin

By Jeffrey Damicog

The onerous provisions in the 1997 water concession agreements should be considered void for violating existing laws, Department of Justice (DOJ) spokesman and Undersecretary Markk Perete said Tuesday (Dec. 10).

Department of Justice (MANILA BULLETIN)
Department of Justice (MANILA BULLETIN)

“Fundamental ‘yung principle ng batas natin na (It is a fundamental principle in our laws that) if a contractual provision is violative of the law then that is a void provision,” Perete said in a radio interview over DZMM.

The spokesman added that under the Anti-Graft and Corrupt Practices Act the government cannot enter into contracts that are “grossly prejudicial to the government or to the best interest of the public.”

The spokesman said a DOJ panel of evaluators has already submitted to President Rodrigo Duterte a report concerning the provisions of the agreements considered to be onerous.

Among these burdensome provisions, Perete cited the non-interference clause which states that the government cannot interfere with the decisions of water concessionaires Manila Water Co., Inc. and Maynilad Water Services, Inc. in determining water prices.

The same provision also indicates that the water concessionaires should receive indemnification in the event the government bars any water price increase.

“That goes against both the MWSS (Metropolitan Waterworks and Sewerage System) law and the nature of the services of public utility,” Perete pointed out.

Under the MWSS law, the spokesman explained the MWSS board of trustees determines the water rates which are either approved or disapproved by the Water Resources Board.

He added that because water is a public utility, a company cannot have the sole determination of water prices because of the danger that they might be made unaffordable for consumers.

Perete said the deals also show that the water concessionaires were required to erect waste water treatment facilities and would be penalized if they failed to do so.

Perete pointed out that while the water concessionaires are being penalized for non-compliance with that provision, the companies can have consumers shoulder the penalties, based on the existing agreements.

“Yun talaga isa sa mga ikinagalit ng Pangulo, na hindi na nga nai-provide yung kanilang undertaking, kumbaga hindi na nga nila na-fulfill yung kanilang undertaking, ngayon na pine-penalize natin siya, ipapasa niya sa consumers ‘yung penalties na ‘yun by the provision of the concession agreement also (That’s one of the things the President is angry about, that the water concessionaires not only failed to deliver their undertakings, but now that they’re being penalized, they passed on the penalties to their consumers),” he explained.

The spokesman added that the President also sought to revoke the 2010 deal that allowed the two water concessionaires to extend the water concession agreements up to 2037.

Perete said the 1997 water concession agreements expire in 2022 and do not have any provisions for extensions.

“Walang provision yung concession agreement for extension. Nakalagay ho roon sa concession agreement is renewal (There is no provision for extension, only for renewal),” he stated.

The spokesman said that there were no changes in the provisions of agreements when the extensions were given back in 2010.

“Pinapa-revoke ng ating Pangulo on the grounds na ‘yung extension is not found in the concession agreement (The President is having the agreements revoked on the grounds that extension is not found in the concession agreements),” Perete said.

 
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