Maynilad, MWSS ink new concession deal
Published May 12, 2023 02:55 am
The Maynilad Water Services Inc. has signed a revised concession agreement (RCA) with the Metropolitan Waterworks and Sewerage System (MWSS) last Wednesday, May 10.
(File photo / Manila Bulletin)
"The amendments are intended, in part, to align some of the RCA provisions with the revised implementing rules and regulations of the Build Operate Transfer Law, consistent with the government's efforts to reinvigorate public-private partnerships," said Metro Pacific Investments Corp. (MPIC), the parent firm of Maynilad.
According to MPIC, the amendments to the RCA included the following:
\- Adjustment in the consumer price index \(CPI\) factor to 3/4 from 2/3 of the percentage change in the CPI for the Philippines;
\- Reinstatement of the Foreign Currency Differential Adjustments \(FCDA\)\, but only to the MWSS loans that are being and will be serviced by Maynilad\, principal payments for drawn and undrawn amounts of Maynilad's foreign currency denominated loans existing as of June 29\, 2022;
\- Introduction of a modified FCDA for Maynilad loans contracted after June 29\, 2022\, but which mechanism may be availed of only when there is an extraordinary inflation or extraordinary deflation of the Philippine peso\, and the amount that may be recovered is capped;
\- Exclusion of certain events from what may not be considered as material adverse government action; and
\- Deletion of the composition and decisions of the regulatory office from what may not be subject to arbitration\.
During former president Rodrigo Duterte’s term in 2022, he signed a law granting Maynilad and Manila Water a franchise to allow them to operate for another 25 years.
Maynilad is the water and wastewater service provider of the West Zone of the Greater Manila Area. (Nicole Magmanlac)
(File photo / Manila Bulletin)
"The amendments are intended, in part, to align some of the RCA provisions with the revised implementing rules and regulations of the Build Operate Transfer Law, consistent with the government's efforts to reinvigorate public-private partnerships," said Metro Pacific Investments Corp. (MPIC), the parent firm of Maynilad.
According to MPIC, the amendments to the RCA included the following:
\- Adjustment in the consumer price index \(CPI\) factor to 3/4 from 2/3 of the percentage change in the CPI for the Philippines;
\- Reinstatement of the Foreign Currency Differential Adjustments \(FCDA\)\, but only to the MWSS loans that are being and will be serviced by Maynilad\, principal payments for drawn and undrawn amounts of Maynilad's foreign currency denominated loans existing as of June 29\, 2022;
\- Introduction of a modified FCDA for Maynilad loans contracted after June 29\, 2022\, but which mechanism may be availed of only when there is an extraordinary inflation or extraordinary deflation of the Philippine peso\, and the amount that may be recovered is capped;
\- Exclusion of certain events from what may not be considered as material adverse government action; and
\- Deletion of the composition and decisions of the regulatory office from what may not be subject to arbitration\.
During former president Rodrigo Duterte’s term in 2022, he signed a law granting Maynilad and Manila Water a franchise to allow them to operate for another 25 years.
Maynilad is the water and wastewater service provider of the West Zone of the Greater Manila Area. (Nicole Magmanlac)