A caretaker checks water meters in Quezon City yesterday. Water concessionaires Maynilad and Manila Water earlier announced they would no longer collect their respective claims awarded by an arbitral court for losses they incurred due to the delayed implementation of rate increases.
Michael Varcas
No ‘crony’ takeover of water firms – Palace
Alexis Romero (The Philippine Star) - December 13, 2019 - 12:00am

MANILA, Philippines — President Duterte’s pressuring the country’s top water distributors is meant to protect the interests of the people and not to pave the way for a takeover of the firms by his friends, administration officials said yesterday.

“Oh no, definitely not,” Presidential Communications Secretary Martin Andanar said when asked in an interview on ANC about speculation that Duterte wanted to replace the “oligarchs” – the President’s description of the owners of the two water concessionaires – “with his own oligarch.”

Andanar said Duterte merely wanted to send a message to Maynilad Water Services Inc. and Manila Water Co. that he is against “onerous” deals and there are no sacred cows in his administration.

With administration critics raising the specter of a crony takeover, Justice Secretary Menardo Guevarra also defended yesterday Undersecretary Emmeline Aglipay-Villar from allegations that she led the review of contracts of the two water firms to benefit her in-laws, who own Prime Water Infrastructure Corp.

Guevarra said Villar’s participation in the review was merely “coincidental” because the members of the review team – the Office of the Government Corporate Counsel (OGCC) and the Office of the Chief State Counsel (OCSC) – are both under the jurisdiction of Villar.

“The Cabinet discussion on the concession agreements was spurred solely by the water crisis and not by any premeditated intent to bring in a supposedly new concessionaire,” Guevarra said.

Villar is married to Department of Public Works and Highways (DPWH) Secretary Mark Villar, son of businessman and former senator Manuel Villar and Sen. Cynthia Villar. 

Andanar, in his interview, said, “I think the purpose here is to send the message to both Maynilad and Manila Water that the President is not accepting this kind of reasoning and this kind of onerous contract. That’s why the MWSS (Metropolitan Waterworks and Sewerage System) revoked the extension of the contract and both Manila Water and Maynilad already wrote a letter to the President.”

Speculation about a takeover of the two water firms by Duterte allies was fueled by his initial tirade against the water concessionaires, during which he mentioned that there were people like Villar who could handle the water distribution.

Andanar said, “The main point here is that we should not be entering into onerous contracts. This is, in fact, doing the business community a favor by telling them that there is no room for corruption in our business industry and under the term of President Duterte.”

“There are no sacred cows. You’ve been asking for big fish, and there you go,” he added.

The concession deals with Maynilad and Manila Water were signed in 1997 during the Ramos administration and was supposed to last for 25 years. The agreements were extended during the Arroyo administration in 2009 by 15 years, or 13 years before they were set to expire.

Last week, Duterte accused the water firms of “screwing” the Filipinos and demanded revisions in the concession deals they signed with the government in 1997.

He said the contracts were contrary to public policy and had violated laws against graft and plunder.

Duterte, in particular, is seeking the removal of contract provisions that he said prohibit the government from preventing water rate hikes and allowing water firms to collect indemnities when they incur losses due to regulatory actions.

Duterte has also decried decisions by a Singapore arbitration court – issued two years apart – ordering the government to pay more than P10 billion to the two concessionaires for the losses they incurred due to the delayed implementation of rate increases.

Maynilad and Manila Water have announced that they would no longer collect their respective claims awarded by the court.

Presidential spokesman Salvador Panelo confirmed yesterday that the water firms had written a letter to Duterte expressing their willingness to revisit the concession agreements.

Last Wednesday, MWSS revealed that it has revoked the extension of the contracts. The development, executives of the water firms said, had sent shivers to investors and creditors.

DOJ defends Villar kin

“I don’t know who may be giving a spin to this. Of course since I am the secretary of justice, I head the review team and to assist me in the review, I naturally used the legal staff of the DOJ, so these are the Office of the State Counsel and the OGCC,” Guevarra said.

“It just so happened that these units are under the supervision of USec Villar, because in the DOJ we have distribution of work,” he pointed out.

“It was just coincidental and not intentional that these offices were placed under Usec Villar because she had a vested interest, certainly not, of course not,” he added.

The justice secretary stressed other good lawyers would surely see the onerous provisions in the water deals.

“Believe me when I say that any good lawyer will see the inequitable provisions in the water concession agreements, and the fact that Usec Emmeline Villar is part of the DOJ review team is totally irrelevant,” he added.

“Remember I am the one on top of all of this so no one can interfere with the review without my knowledge and without my permission, definitely not,” he said.

For her part, Villar said it was Guevarra who led the review and that the Office of the Secretary had already given Congress a copy of their review of the contracts.

“It was the secretary himself who conducted the review and who issued the memorandum regarding that to the President. So prior to that review there were already several provisions that were identified as being onerous and that were reported in the broadsheets and news, and that’s why the President had asked the DOJ to conduct a more thorough review which was headed by the secretary, not me,” Villar said.

She assured the public that the DOJ has conducted a disinterested review of the concession agreements.

Compliance assured

As lawmakers continue their review of the water contracts, Maynilad and Manila Water have expressed willingness to comply with the order of a joint committee of the House of Representatives to submit pertinent documents regarding their concession agreement with the government.

Maynilad president Ramoncito Fernandez and Manila Water president and chief executive officer Jose Rene Almendras have reassured the committees on good government and on public accountability they would be furnished with the contracts they have requested.

Rep. Lito Atienza of party-list Buhay, a vocal critic of the two firms, want them to submit a complete accounting of borrowings in the name of their concession contract – from the World Bank, Asian Development Bank and other foreign lending institutions.

“These are all covered with the sovereign guarantee of the Filipino people,” the former Manila mayor said.

“They have been declaring net profits at the Philippine Stock Exchange every year, individual and corporate and they even gave dividends. We want a complete picture of this,” Atienza said.

“This would prove that they are not losing money, but they want to make more money. Public utilities such as water should never fall into the hands of private businesses. They will always be profit motivated and not public service oriented,” Atienza added.

Administration congresswoman Rep. Bernadette Herrera, for her part, said the two public utility companies should voluntarily open to public scrutiny their books from 1997 to the present of they don’t want to be disqualified from future bidding.

“We want a meticulous audit of the MWSS water contracts. We want every name, every signature, every initial, every person who had any role in the cancelled MWSS resolution charged and prosecuted,” Herrera said.

“If there was any kind of bribery and other forms of graft and corruption at play, the more that these unfaithful public servants and corporate officials should be prosecuted,” she stressed.

Herrera said the “war against Manila Water, Maynilad and MWSS is not yet over.”

“The water services sector must be opened up to at least three more players and certainly not the likes of Manila Water and Maynilad who have been milking the Filipino people for profits all these years with the aid of the MWSS,” she said.

Sen. Imee Marcos said she has initiated moves in the Senate to probe Manila Water and Maynilad contracts and records.

Marcos on Tuesday filed Senate Resolution 259 calling for an examination of provisions in the original and extended concession agreements to check if they are against taxpayers’ interest.

Water concession agreements require both companies to ensure an uninterrupted supply of drinking-quality water “not later than June 30, 2000,” or three years after the government privatized water services.

Sen. Grace Poe said the search and development of new water sources should continue to ensure steady supply.

“While we work towards the creation of a water agency, we look forward to these projects to meet immediate needs,” Poe said.

“Water is a vital gift of nature, but the most misused and ignored. We should act quickly to make productive use of the water assets that we have,” Poe said.

“The last thing we want is for agencies and private entities to be pointing fingers as to who is at fault. We need to act fast to address the situation because demand is increasing and we are not producing enough quality water for the Filipinos,” she added.

Sen. Sherwin Gatchalian is calling for a renegotiation of business agreements between MWSS and the two major water concessionaires.

At a hearing by the Senate public services committee on the creation of the Water Regulatory Commission, Gatchalian hit officials of Maynilad and Manila Water for passing on to consumers company expenses not related to water distribution, such as charitable contributions, expenses for basketball games, sports clinics and other forms of donations, among others. -Delon Porcalla, Evelyn Macairan, Cecille Suerte-Felipe, Artemio Dumlao



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