Water companies: ‘We will abide by what the President wants’

By Ben Rosario

Apparently succumbing to public and government pressure, water concessionaires Manila Water Co., Inc. and Maynilad Water Services, Inc. Tuesday declared they will no longer collect from government the total P11.8 billion they won through a Permanent Court of Arbitration (PCA) ruling.


Appearing before a joint briefing at the House of Representatives, Jose Rene Almendras, president and CEO of the Ayala-led Manila Water, and Ramoncito Fernandez, president and CEO of Maynila, also said their companies will indefinitely defer the 780 percent water rates increase in January 2020.

Almendras and Fernandez also said their respective companies are amenable to a government review of its concession agreement (CA) with government which President Rodrigo Duterte has decried as disadvantageous to the public.

Following threats by the two water companies to impose water rates adjustments after getting affirmative decisions on their multi-billion peso petitions before the PCA, Duterte warned of a government takeover of their operations.

The chief executive also rejected the PCA rulings even as he vowed to file plunder charges against officials of the water concessionaires and the government officials involved in the approval of the allegedly onerous contracts.

“Yes. We will abide by what the government and the President want,” said Almendras, who used to serve as secretary to the Cabinet of former President Benigno Aquino III.

In a prepared statement, Almendras said his company has come into a decision to work with the government “to look for solutions to the arbitral award” granted by the PCA.

“We abide with what President Duterte wants which is to review the concession agreement,” Almendras said.

Fernandez said he was given the go-signal by Maynilad management to make the announcement on behalf of the company.

“We reiterate that we agree with what the President wants,” said the Maynilad executive at the standing room only-hearing jointly presided over by Reps. Jonathan Sy-Alvarado (NUP, Bulacan) and Michael Defensor (Anakalusugan Partylist).

However, upon questioning by Reps. Robert Ace Barbers (NP, Surigao del Norte) and Lito Atienza (Buhay Partylist), the two water company executives clarified that an increase in water rates in the future will depend on the state-run regulator, the Metropolitan Waterworks and Sewerage System (MWSS).

“Our suggestion was to defer it (rates hike) and discuss with the regulatory office but the increase in January, 2020, hindi na po itutuloy (will no longer be implemented),” Almendras said.

He said if the MWSS will demand the continued implementation of water projects, they will have no other recourse but to adjust water supply cost.

“Kung sinabi ng MWSS na wala na kaming gagawin, wala na kaming karapatan para humingi ng increase,” the Manila Water official explained. (If the MWSS says we no longer have to do anything, we no longer have any right to ask for an increase).

The PCA awarded Maynilad and Manila Water P3.4 billion and and P7.4 billion in penalties respectively against the Philippine government over losses they allegedly incurred following the latter’s rejection of their respective proposals for rates hikes on various occasions.

The Philippine government has vowed not to abide by the arbitral award as President Duterte called for a review of the CAs extended during Aquino’s term.

Quezon Rep. David Suarez decried the extension of the CA’s life, pointing out that it was done 13 years before the original CAs were to expire.

“Wala pa nga sa midway ng kontrata, nag-renew na. (It is not even midway through the contract but it was already renewed) This is highly irregular, there is no need to rush,” said Suarez, pointing out that the original contract was to expire in 2022.

Also present at the hearing were MWSS vice chairman Lt. Gen. Emmanuel Salamat (retired) and Office of the Government Corporate Counsel lawyer Wynard Arcedon.

Salamat has been ordered by the House panels to submit the MWSS recommendations on the proposal for an early CA extension.

Arcedon explained that from the OGCC’s legal standpoint, there is no legal impediment that could have prevented the highly suspicious proposal to extend the CA.