Gov’t to forge new contract with water firms

THE Department of Justice will negotiate with two water concessionaires in Metro Manila on the proposed new contract after the President ordered their review due to alleged onerous provisions.

Justice Secretary Menardo I. Guevarra said President Rodrigo R. Duterte last night approved the proposed contract for Maynilad Water Services, Inc. and Manila Water Co., Inc.

The new contract removed the “onerous” provisions in the previous deal, Mr. Guevarra said.

“New provisions that will be incorporated, that will somehow, that will make the water concession agreements more equitable, more transparent and will lessen contingent liabilities on the part of the government plus improving its governance system,” he said during the Kapihan sa Manila Bay forum.

“In principle, the President has approved our recommendation so the next step will be to sit down with the two water concessionaires in Metro Manila to discuss the specific terms and conditions of a proposed new water concession agreement with each of them,” he added.

Mr. Guevarra told reporters via Viber message that the President did not give a deadline, but the review panel intends to meet them as soon as possible.

The Justice department in December last year said it found a dozen of onerous provisions on the contracts of the water concessionaires.

This includes the provision on the non-interference of the government in rate-setting and the liability of the government if the companies suffer losses. It also found as irregular the extension of their contracts until 2037, years before the original expiration in 2022.

President Rodrigo R. Duterte in June said that he was fine with the contracts of the water suppliers as long as they “pay back” to the consumers. He also said that he would  file cases against them if they do not approve the proposed contracts.

The concessionaires previously won an arbitration case, which ordered the government to pay them indemnity for the losses they suffered. Both the companies said they would not pursue the awards. — Vann Marlo V. Villegas

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