New water concession deals favorable to consumers – DOJ   

Published January 13, 2020, 12:00 AM

by manilabulletin_admin

By Rey Panaligan

Justice Secretary Menardo I. Guevarra on Monday, January 13, said “it is the consuming public, not profit-seeking capitalists, who need more protection by government”.

Senior Deputy Executive Secretary Menardo Guevarra (TOTO LOZANO/PRESIDENTIAL PHOTO / MANILA BULLETIN)
Justice Secretary Menardo Guevarra

Guevarra’s statement was issued in reaction to Sen. Francis Pangilinan’s warning that it is a crime to force the water concessionaires to accept the contracts proposed by the government.

Pangilinan had also warned that the arm-twisting done by the government against the water concessionaires — Manila Water Co. Inc. and Maynilad Water Services, Inc.  – will likely drive away investments that create jobs in the country.

Guevarra reiterated that the government is still open to discuss the proposed amendments to the water concession agreements with the two concessionaires.

“These proposed new contracts will not be absolutely imposed upon the water concessionaires, as they will be given a reasonable opportunity to comment on the proposed amendments in an open and public discussion of the issues,” he pointed out.

He stressed that “these proposed new contracts intend to remove all illegal provisions and foster greater transparency and equitability in rate-setting, and should therefore provide a more stable and comfortable environment for investors.”

Among the provisions in the old contracts that would be deleted are those which prohibit the government from interfering in the rate-setting mechanism between the two water firms and the Metropolitan Waterworks and Sewerage System (MWSS).

Earlier, President Duterte had  warned that the government will be forced to take over water services should the two firms refuse to accept the new contracts.

Guevarra said “the government’s takeover or nationalization of water distribution, as authorized under Sections 17 and 18, Article XII of the Philippine constitution, is the government’s last option.”

Section 17 provides: “In times of national emergency, when the public interest so requires, the State may, during the emergency and under reasonable terms prescribed by it, temporarily take over or direct the operation of any privately-owned public utility or business affected with public interest.”

On the other hand, Section 18 states: “The State may, in the interest of national welfare or defense, establish and operate vital industries and, upon payment of just compensation, transfer to public ownership utilities and other private enterprises to be operated by the Government.”

Earlier, Guevarra had said it may take six months to finalize the new contracts with the two firms.

“The government will come up with a draft agreement that has no legally objectionable provisions, is fair and equitable, more transparent, and advantageous to the consuming public,” he said.