Metropolitan Waterworks and Sewerage System (MWSS) said the new concession agreement (CA) between the Philippine government and Manila Water Company, Inc will be beneficial to all — the government, the public, and the Ayala-led east zone concessionaire.
Speaking for the first time since the new CA deal was signed last week, MWSS Board Chairman and Acting Administrator Reynaldo V. Velasco said "the contract is both advantageous to the Government, a big win for the Filipino people and the consuming public and that it is commercially and economically viable to the investors and concessionaire”.
Velasco also lauded the collective efforts of the government panel involving several top officials from the Office of the Executive Secretary, the Department of Finance, Department of Justice, Office of the Solicitor General, Office of the Government Corporate Counsel, among others, that collectively pursued over several months the completion of the new CA.
Velasco signed the contract for MWSS in his capacity as Board Chairman and Acting Administrator.
The new CA is modeled after the New Clark City joint venture agreement of the Bases Conversion and Development Authority (BCDA) which was developed with the assistance and advice of the Asian Development Bank (ADB).
To be specific, the CA review committee decided to remove the government non-interference clauses in the new provisions of the water deal as well as the provisions that duly compromise medium and long-term government liabilities.
All debt and expenditures of the concessionaire will also be reviewed and approved by the regulatory office, while all fully recovered assets are immediately transferred to the government to ensure there is no double payment at the end of the contract.
From now on, and based on the new CA, corporate income tax cannot be charged to the consumer; tariff adjustment for inflation will be two-thirds of the consumer price index unlike the previous contract which had a 100-percent inflationary impact; and there will be no more FCDA, a quarterly-reviewed tariff mechanism that allows Concessionaires to recover losses or give back gains arising from fluctuations in foreign exchange rates.
All of these things, while there will be a tariff freeze until 31 December 2022.
With the signing of the Revised Concession Agreement (CA), the continuation of Manila Water's concession until July 31, 2037 is affirmed.