MANILA -- Banks have "suspended" loans to Maynilad Water Services Inc, preventing it from starting service improvement works, with the fate of its concession uncertain, its parent company said Monday.
The concessions of Maynilad and Manila Water Co will expire in 2022 after the Metropolitan Waterworks and Sewerage System took back its earlier decision to extend the contracts.
President Rodrigo Duterte had said that the country was being "milked by billions" by the two distributors' win before a Singapore-based arbitration panel, which will enable them to collect P10.8 billion in compensation from the government. They later dropped the claim.
“While Maynilad can finance its current projects, the shortening of the concession term prevents it from commencing new projects to improve the system, as the banks have suspended lending money to Maynilad to finance it new capex program,” MPIC said.
Metro Pacific issued the disclosure to the stock exchange in reaction to an article on Business Mirror, which said capital expenditures were on hold.
Maynilad remains “hopeful” that a renegotiation of the agreement will result in a “satisfactory resolution” of issues, Metro Pacific said.