Concession talks with Manila Water begin

A negotiating team led by the Department of Justice has started negotiations with Manila Water for the revision of its existing water concession agreement with the government.

Justice Secretary Menardo Guevarra made the disclosure on Wednesday, but declined to provide details of the ongoing discussion.

Guevarra also said the government panel would sit down next with the other big water utility firm, Maynilad, also on the proposed amendments to their existing concession agreement.

“The review panel is currently discussing the draft revised water concession agreement with Manila Water. We will sit down with Maynilad soon thereafter,” Guevarra said, in a text message to reporters.

The DOJ chief would not say when the discussion actually started and when it is expected to be finished, but expressed optimism that the revised contracts would be amenable to all parties.

 “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 ,” Guevarra stressed.

 Last November, President Duterte gave the DOJ the go-signal to sit down with the two water concessionaires for the proposed revision of their existing contracts.

 Guevarra earlier said among the provisions in the existing concession agreements that would have to go are the non-interference in the rate-setting mechanism of the two water firms and the Metropolitan Waterworks and Sewerage System (MWSS) and its twin provisions on indemnification arising from such government interference.

Duterte ordered the DOJ to review the concession agreements after discovering onerous provisions in the existing contracts, and after the Permanent Court of Arbitration (PCA) in Singapore issued a decision stating the Philippine government should pay P7.4 billion to Manila Water and P3.4 billion to Maynilad for the losses they suffered from unenforced water rate hike.

The President criticized both Manila Water and Maynilad and threatened to file a case of economic sabotage against the two water firms due to the “onerous” 1997 contracts with the government.

Last December, the drafting committee composed of representatives from the  Office of the President, Department of Finance, DOJ, Office of the Solicitor  General and Office of Government Corporate Counsel came up with a draft based on the terms approved by the review committee.

The draft was then forwarded to the secretaries and the review committee for approval.

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