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Maynilad reaches new deal with gov't, ending water row

Ian Nicolas Cigaral - Philstar.com
Maynilad reaches new deal with gov't, ending water row
Justice Secretary Menardo Guevarra told reporters on Tuesday both sides are “ready” to ink the new agreement, which he said contains “essentially the same” provisions with that of Ayala-led Manila Water Company Inc. signed last March. 
STAR / File

MANILA, Philippines — Pangilinan-led Maynilad Water Services Inc. is finally sealing a new water deal with the government that will see it staying as one of Metro Manila’s water providers, ending a costly row with President Rodrigo Duterte.

Justice Secretary Menardo Guevarra told reporters on Tuesday both sides are “ready” to ink the new agreement, which he said contains “essentially the same” provisions with that of Ayala-led Manila Water Company Inc. signed last March. 

That means the removal of several provisions such as the non-interference clause that in the original agreement, prevents a government agency apart from water regulators in opposing rate hike applications. The new deal, if indeed drafted similarly as Manila Water’s, would also prohibit the company from passing corporate tax costs to customers. 

On the part of Maynilad, the deal should have included an extension of its present contract bound to expire next year. How long the extension was remains unclear as company officials have not responded to request for comment as of press time.

That said, the culmination of talks between the government and Maynilad punctuated a bitter road to renegotiation triggered by Duterte’s attacks to the water distribution firms in Metro Manila during the water shortage in 2019. 

At the time, Duterte castigated the companies for supposedly “onerous” provisions in their original contracts that put the public at a disadvantage. In reality however, such government contentions did not surface until then just when Duterte wrongly faulted Maynilad and Manila Water for the shortages caused by government-ran dams drying up.

From there, Duterte had also refused to honor an international ruling that orders government to pay Manila Water and Maynilad a combined P11 billion over rate increases that were not enforced. The companies had since dropped their claims, but Guevarra said the new Maynilad contract contains a provision that formalized this. 

The tension between the business tycoons and Duterte only subsided in March last year when, in an appeal for help in dealing with the pandemic, Duterte apologized to the Zobel brothers and Manuel V. Pangilinan. The businessmen accepted the sorry, but Guevarra had said the president’s apology was immaterial to then ongoing talks.

Maynilad is expected to release more details about the agreement on Wednesday. 

MAYNILAD WATER SERVICES INC

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