Palace says new water concession agreement with Manila Water
Malacanang said on Monday that the new water concession agreement with Ayala-owned Manila Water Corp. is "very advantageous" to the national government and the consumers as the government hopes to come up with an almost similar deal with Pangilinan-led Maynilad Water Services.
In a televised press briefing, Presidential Spokesperson Harry Roque said the new deal with Manila Water was modeled after the New Clark City joint venture agreement of the Bases Conversion Development Authority as advised by the Asian Development Bank.
The agreement was signed on March 31.
He said one of the salient points of the new agreement was the removal of government non-interference clauses, which means the government will no longer be liable when fulfilling its regulatory functions to protect consumer.
There was also a recognition that Manila Water is a "public utility," and as such makes it more accountable to the government and the public, he said.
Under the revised agreement, there was a removal and addition of provisions that unduly compromise medium and long term government liabilities, such as removal of the national government's performance undertaking for future debt; all debt and expenditures of the concessionaire must be reviewed and approved by the regulatory office; all fully recovered assets are immediately transferred to the government to ensure there is no double payment at the end of the contract; and material government adverse action is limited only to actions of the Executive so that the national government is not liable for things outside of its control.
The new deal also stipulated that corporate income tax cannot be charged to the consumer, unlike the previous agreement, and there is a tariff freeze until December 31, 2022.
Roque said any tariff adjustment for inflation will only be two-thirds of the Consumer Price Index unlike the previous contract which had a 100 percent inflationary impact.
He also said the foreign currency differential adjustment was removed. This will result in the much lower tariff increases and protect the consumer from possible tariff spikes because of foreign exchange movement, he said.
The Department of Justice has led the review of the concession agreement with the water concessionaires. The new agreement with Manila Water was signed last week.
In the same press briefing, Justice Secretary Menardo Guevarra said the negotiations with Maynilad will start immediately.
He said they will be proposing essentially the same terms and conditions with Maynilad as those that were contained in the revised deal with Manila Water.
"But of course, we recognize the fact that Maynilad is differently situated compared to Manila Water so there will be probably a lot of discussions also with respect to possible modification of the terms and conditions," he said.
Asked if the government will still file cases against the water concessionaires due to alleged onerous 1997 contract with the government, Guevarra said, "Under the new concession agreement, there is a provision there about waiver of claims."
"At the same time, when this revised concession agreement was executed, there's a simulatenous deed of settlement and release that were signed by both sides. But this release pertains only to the claims arising from the contract itself, like for example, those awarded by Singapore arbitration tribunal were waived and any other claims arising from old concession agreement," he said.
But for criminal liability, Guevarra said it is totally a different matter and needs further studies.
"And besides, somebody's got to put up the complaint before the Department of Justice or before the Office of the Ombudsman. Right now, we have not heard of any party who has filed or is attempting or thinking of filing something like that with the Office of the Ombudsman or with the Department of Justice," he explained.
President Rodrigo Duterte earlier threatened to file charges against the water concessionaires for the alleged onerous contracts signed by the previous administrations.
At the same time, he ordered a review and renegotiation of the water concession agreements with the two major water utilities in the country. Celerina Monte/DMS
