The government has started its negotiations with Manila Water Co., Inc. on its existing water concession agreement, Justice Secretary Menardo I. Guevarra said on Wednesday, Feb. 10.

Guevarra said the talks are focused on the revised draft of the agreement with Manila Water.  “We will sit down with Maynilad Water Services, Inc. soon thereafter,” he said.

“Sorry, no further details at this time. Suffice it to say that the revised water concession agreement is a great improvement over the original agreement, as it does away with the onerous provisions of the latter, without making the concession less economically viable,” he said.

It is expected that the provisions in the existing contracts on the non-interference in the rate-setting mechanism of the two water firms and the indemnification provision arising from such interference would be one of the important issues in the talks.

Last November, President Duterte directed the Department of Justice (DOJ) to talk to the two water concessionaires for the proposed revision of their existing contracts.

Duterte’s directive was issued after the President discovered onerous provisions in the existing contracts.

It was also triggered by a decision of the Permanent Court of Arbitration (PCA) in Singapore which directed the Philippine government to pay P7.4 billion to Manila Water and P3.4 billion to Maynilad for the losses they suffered from unenforced water rate increases.

 Last December, a committee composed of representatives from the Office of the President, DOJ, Department of Finance, Office of the Solicitor  General and Office of Government Corporate Counsel came up with a draft which was submitted to the Cabinet secretaries and the review panel.