By Jeffrey Damicog
The government will still push through with revised water concession deals for Metro Manila even though businessman Enrique Razon Jr., a known ally of President Duterte, recently bought a 25 percent stake in Manila Water Company, Inc.
Justice Secretary Menardo Guevarra pointed this out on Wednesday (Feb. 5) as the Department of Justice (DOJ) continues to draft the revised water concession agreements (CA) to be presented to Metro Manila water concessionaires Maynilad Water Services, Inc. and Manila Water.
Justice Secretary Menardo Guevarra (TOTO LOZANO / PRESIDENTIAL PHOTO / FILE PHOTO / MANILA BULLETIN)
When asked if Razon’s stake would have any effect on the renegotiation of the water deals, Guevarra replied, “No effect whatsoever.”
“The CA will be revised for the benefit of the consuming public, regardless of the ownership of the water company,” the DOJ chief said.
In a disclosure to the Philippine Stock Exchange, the Ayala group said the billionaire tycoon bought a strategic P10.66 billion subscription of Manila Water, equivalent to a 25 percent stake. With the transaction, the Ayala group’s stake in the water firm was diluted to 38.6 percent.
The DOJ proceeded with the drafting of the revised deals after having submitted to the President a report that the current water concession agreements contain onerous provisions.
“Inputs on the financial and commercial provisions are now being incorporated in the draft,” Guevarra said on Wednesday. “Once consolidated, we may start discussions with the concessionaires in March.”
Among these onerous provisions, the DOJ cited the non-interference clause which states that the government cannot interfere with the decisions of the water concessionaires in determining the water prices.
The same provision also indicates that the water concessionaires are to receive indemnification in the event the government stops any water price increase.
These are against Metropolitan Waterworks and Sewerage System (MWSS) laws that state the MWSS board of trustees determines the water rates which are either approved or disapproved by the Water Resources Board.
Also under the agreements, the water firms can have the consuming public shoulder the penalties for the failure of the water concessionaires to erect water treatment facilities.
The government also sought to revoke the 2010 deal that allowed the two water companies to extend the water concession agreements up to 2037. The 1997 water concession agreements which will expire in 2022 do not have any provisions for extensions.
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