Panelo: Onerous Water Contracts ‘Bleeding Our Country Dry’

The onerous water concession agreements between the government and water concessionaires Manila Water Co. and Maynilad Water Services Inc. are “bleeding our country dry”, Malacañang said.

Presidential Spokesperson Salvador Panelo made this remark after President Rodrigo Duterte slammed the decision of the Permanent Court of Arbitration in Singapore directing the Philippine government to pay water concessionaires Manila Water and Maynilad billions of pesos for the non-implementation of water rate increases that occurred during the administration of former President Fidel Ramos.

“It is apparent that some members of the government have not only looked the other way but have in fact purposely guided the hands of those who have raped our economy for their own personal aggrandizement,” Panelo said in a statement.

“Worse, they are hell-bent on bleeding our country dry. The proper delivery of basic services has not been fostered but thwarted to the outrageous detriment of the Filipinos,” he added.

Manila Water is a subsidiary of Ayala Corporation while businessman Manuel V. Pangilinan’s Metro Pacific Investments Corporation owns a controlling stake in Maynilad.

The two private companies distribute water in Metro Manila and other parts of the country under agreements signed with state regulator Metropolitan Waterworks and Sewerage System (MWSS) in 1997.

In a speech on Tuesday night, Duterte lashed out at the water concessionaires after a review conducted by the Department of Justice (DOJ) showed the water contracts were “onerous and disadvantageous to the people, relative the terms or periods, government non-interference, as well as concessionaire indemnification for losses.”

Due to the two provisions, the government was ordered by the Singapore arbitration court to pay Maynilad about PHP3.6 billion and, recently, PHP7.4 billion to Manila Water as compensation for losses and damages, Justice Secretary Menardo Guevarra said.

The DOJ chief said another onerous provision is the extension of these contracts to 2037 considering that the extension was granted 12 to 13 years before the original expiration of the 25-year concession agreements in 2022.

Duterte directed the DOJ and Office of the Solicitor General, to draft a new water concession contract that is “favorable to the State and the Filipino people”.

He also asked them to file economic sabotage cases against all those involved in the agreements including the latter’s owners and legal counsels, and agents and lawyers of the government.

The President also said he is “ready to go down” for his decision but would drag with him the “oligarchs” who treated water as a “commodity” and not a natural resource.

“And we will expose them. And I will insist that they be tried for economic sabotage,” Duterte said.

Echoing the President, Panelo said the water concessionaires not only “abused” the arrangement of delivering state-owned water to the citizens but have treated it as “a money-making venture.”

“Under the Constitution, all natural resources of the Philippines, including water, belong to — and are owned by — the State. It is indisputable that water is intended for the use, enjoyment, and welfare of the citizens,” Panelo, also Chief Presidential Legal Counsel, said.

The Palace official, meanwhile, assured that the Duterte administration will carry out measures to ensure that those involved in the onerous deals were penalized.

“We put everyone on notice that the constitutional command to the President to serve and protect the Filipino people shall be complied with passion and dedication, regardless of whatever power or influential groups are run over,” Panelo said.

“Those who impede or derail the constitutional directive to the President to serve and protect the people shall find themselves behind bars with free food and lodging,” he added. (PNA)
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