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Business

After Duterte attacks, gov't silently inks new deal with Manila Water

Ian Nicolas Cigaral - Philstar.com
water
President Rodrigo Duterte has berated both Manila Water Company Inc. and Maynilad Water Services Inc. and accused the two companies of forging contracts with “onerous” provisions that are disadvantageous to the public.
The STAR / Edd Gumban, File

MANILA, Philippines — President Rodrigo Duterte’s attacks to Manila Water Company Inc. silently culminated with a new deal that will see the Ayala-led firm staying as one of Metro Manila’s water providers while the public get a “more equitable” treatment. 

Details of the agreement signed on Wednesday have not been released by Justice Secretary Menardo Guevarra who only told reporters that the terms ensure “better overall service and more reasonable charges to consumers.”

Manila Water representatives cannot be reached for comment as of this posting.

Manila Water services half of Metro Manila residents, with the other half are connected to Pangilinan-led Maynilad Water Services Inc. whose contract was also ditched unilaterally by the government last year. Guevarra said negotiations with Maynilad for its own agreement will begin after the Holy Week holidays.

The completion of negotiations came over a year after Duterte blamed Manila Water and Maynilad for the capital’s water shortage in 2019 mainly traced from dwindling supply flowing from government-operated dams. He also castigated them for securing international rulings that mandated the state to pay up P11 billion in charges representing supposed earnings from contractual rate hikes that did not push through.

Eventually the popular president, who vowed to run after the elite during his presidential campaign, was able to get his way and prompted the water concessionaires to give up their claims. Duterte also threatened to sue the firms for alleged “onerous” terms under their old contracts, which Guevarra is unsure if no longer on the table considering the new deal.

“I can’t say with any certainty if the government will pursue any legal action arising from the old agreement. There are many factors to consider,” he told reporters. Just last March 18, Duterte publicly attacked water firms anew, telling them to settle their state obligations, without providing specifics.

That said, the deal was struck after a shake-up in Manila Water leadership with the entry last year of ports tycoon Enrique Razon Jr., largely seen in better standing with Duterte.

In 1997, private water concessionaires took over Metro Manila’s water distribution to save the government from huge debts in managing the system. Since then, the two companies invested heavily on new pipes to prevent leaks, as well as exploring new water sources to minimize dependence from similarly old dams. 

It was in January 2020 when Duterte officially announced that the government is reneging on its contracts, adding threats to take back the water distribution business from the firms. The tension only subsided in March last year, overtaken by the pandemic that saw Duterte apologizing to the Zobel brothers and Manuel V. Pangilinan as part of a broader call to private sector to pitch in on his pandemic response.

News of the new water deal came after trading hours. Shares of Manila Water closed up 1.18% to end the first quarter trading at P16.08 apiece. — with Kristine Joy Patag

MANILA WATER COMPANY INC.

MAYNILAD WATER SERVICES INC

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