MWSS not shutting out Maynilad, Manila Water

MANILA, Philippines — There is still hope for the two water concessionaires to remain as Metro Manila’s water distributors as the Metropolitan Waterworks and Sewerage System (MWSS) has maintained it is not shutting them out of the picture.

MWSS administrator Emmanuel Salamat said Maynilad Water Services Inc. and Manila Water Co. Inc. are here to stay despite threats from President Duterte to send the military to take over their operations.

“We are not shutting both firms out of the picture. The extension of the water concession deals has not been outrightly revoked, only the board resolution outlining the terms of the extension,” Salamat said.

“It is a subject for renegotiation. The extension will be a subject for renegotiation and so we are not saying per se that they are already done,” he added.

MWSS had announced there would be no extension to the concession agreements after their expiration in 2022.

President Duterte on Thursday threatened the two water firms with a military takeover if they fail to fix their operations.

“I’ll just prepare the charges. If we fail to reach an agreement, economic plunder. Economic plunder there is no bail,” Duterte said in remarks at a birthday party for former Senate president Manny Villar.

“I will order the Armed Forces to operate your water. Go ahead soldier, take over,” he added.

Maynilad and Manila Water said they had already begun talking with the MWSS to iron out things with the regulator.

Reacting to the President’s threat of military takeover, Justice Secretary Menardo Guevarra said the Chief Executive is actually allowed under the Constitution to order a government takeover of private firms to protect public interest.

“Under the Constitution, the state may temporarily take over or direct the operations of privately owned public utilities or businesses affected with public interest: in case of national emergency and when public interest requires it,” Guevarra told reporters.

Such actions should be based on “factual issues that only the president, as chief executive, can determine.”

MWSS, for its part, said they are now taking their cue from Duterte’s mandate to strip away onerous provisions in the concession deals.

“Whatever contract will be given to me by DOJ, we will offer it to the two concessionaires and if they will accept it, I think that’s the only thing the President wants, that we start a new contract without the onerous provisions,” Salamat said. MWSS could not say when the new deals will be finalized.

The MWSS Regulatory Office, meanwhile, said water rates will not be affected by the ongoing renegotiation.

“We assure the public that this will not happen, we will not allow that drastic increase in water rates,” MWSS chief regulator Patrick Ty said.

Combined market value of water related stocks has plummeted since Duterte started his tongue lashing of the two firms two weeks ago.

It is estimated than more than $2 billion in stock value has been wiped out from the equities of Maynilad and Manila Water and Maynilad owners Metro Pacific Investments Corp. and DM Consunji Inc.

Maynilad and Manila Water got a dressing down from President Duterte, who accused them of fooling the public and the government through onerous provisions in their contracts.

“And I will declare the suspension of the writ of habeas corpus but only against economic saboteurs. It will not include the NPAs because they are nosy,” Duterte said, referring to the communist New People’s Army.

“And I will arrest all of you, I want to see billionaires in jail,” he added.

Duterte’s repeatedly lambasting the two firms has spawned speculations he is paving the way for their takeover by an oligarch-friend that many believe is the Villar family. The Villars operate a water company called Prime Water.

The President scoffed at the insinuation. On Thursday, he heaped praises on former Senate president Manny Villar during the latter’s birthday party. Villar’s wife, Sen. Cynthia Villar, is a Duterte ally, while son Mark is the public works chief. Mark is married to Justice Undersecretary Emmeline Aglipay-Villar.

Meanwhile, Aglipay-Villar said she is inhibiting from the team involved in the review of the concession agreements with Maynilad and Manila Water.

“To eliminate any cloud of doubt on the impartiality of the department’s review and renegotiation of the water concession agreements with the Metropolitan Waterworks and Sewerage System that my affinity to the owners of Prime Water Infrastructure Corp. has brought, I am inhibiting from any involvement in the department’s review and renegotiation of the said agreements,” she said. – With Christina Mendez, Robertzon Ramirez