Duterte wants to 'renegotiate' parts of Manila Water, Maynilad deals: DOJ


Posted at Dec 10 2019 08:40 AM | Updated as of Dec 10 2019 09:03 AM

President Rodrigo Roa Duterte delivers a speech at the Malacañan Palace on Dec. 3, 2019. Toto Lozano, Presidential Photo

MANILA — President Rodrigo Duterte wants to "renegotiate" some provisions of the government's concession agreement with Manila Water and Maynilad, the Department of Justice said Tuesday, adding the government will "resist" paying P10.8 billion in compensation to the utilities.

A provision that bars the government from interfering in water rates violates a law that mandates the Metropolitan Waterworks and Sewerage System to set them, said DOJ Spokesperson Markk Perete. 

Duterte was "riled up" over many expenses that "seem to be passable" to consumers, including interest charges for the loans of Maynilad and Manila Water, business taxes, payment to arbitrators, and penalties for failing to set up wastewater treatment facilities, he said. 

The President wants to revoke the extension of the firms' contracts, which was done some "12 or 13 years" before the original expiration in 2022, Perete said. 

"The President said gusto niyang makausap iyong (he wants to talk to the) 2 concessionaires, as well as iyong government lawyers and officials who negotiated with the concessionaires," he told radio DZMM. 

"We need to renegotiate the provisions of the contract which are onerous and number 2, ire-resist natin iyong (we will resist the) demand for payment based on a provision of a contract that violates our laws. 

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The Singapore-based Permanent Court of Arbitration earlier ordered government to pay P3.4 billion to Maynilad and P7.4 billion to Manila Water as compensation for losses the water concessionaires incurred due to denied rate increases.

Duterte refuses to settle the compensation "because that is based on a provision [of the] concession agreement which is illegal," said Perete. 

The arbitral ruling needs to be confirmed by local courts and during the proceedings, the Office of the Solicitor General will question "the legality of the basis for the awards," he said. 

Maynilad and Manila Water appear to be "willing to sit down and talk to the government," based on their previous statements, said Perete.