MANILA, Philippines - The local Japanese Chamber of Commerce hit the decision of Metropolitan Waterworks and Sewerage System (MWSS) to order Manila's water concessionaires to cut their rates, a decision that would hurt Marubeni Corp., one of its members and a partner in Maynilad Water Services Inc.
The chamber made the statement a day after Maynilad filed an arbitration case against MWSS.
MWSS released its decision last month and Ayala-controlled Manila Water Co. quickly filed for arbitration.
They said MWSS cut their rates because they supposedly subtracted expenses they aren't allowed to, and didn't pay income taxes. The companies say the 1997 concession agreements exempted them from income tax.
"We view the MWSS's unilateral and arbitrary act of changing the terms or interpretation of the concession agreement, in total disregard of the contractual
rights and intent of the parties, with grave concern," the chamber said in a statement e-mailed by a public relations company.
"We respectfully request the assistance of the Philippine government in ensuring that contracts to which the Philippine government or any of its owned or controlled corporations is a party, are not unilaterally and arbitrarily changed, but are faithfully complied with," the chamber said.
Marubeni bought 20 percent of Maynilad this year, making it partners in the company with Manuel Pangilinan's Metro Pacific and the Consunji family's DMCI Holdings for an estimated $400 million.
The company said failure to honor the terms of he concession agreement, could hurt the government's already slow pace of public-private partnership projects.
"The decision of foreign investors to invest in long-term PPP projects in the Philippines is due to a large extent on their belief that the Philippines has a stable and predictable regulatory environment, and is a country that guarantees the biding effect and sanctity of contracts," the chamber said.
The privatization of Manila's water services was the biggest of its kind in the world and has been cited by various organizations as a good example of public-private partnership.