President Rodrigo Duterte on Tuesday threatened to slap economic sabotage charges against two major water concessionaires and lawmakers who approved government contracts with them, lamenting that water has become a business for “oligarchs.”
The President, in his speech Tuesday evening, said he was furious because the government is required to pay Manila Water and Maynilad billions of pesos for non-implementation of rate hikes.
“I will file economic sabotage. I will arrest them all. They will experience what it feels like to be a prisoner. If they will include me, I will join them in prison,” he said in a speech in Malacañang.
“I will make their life hereon very, very, very miserable,” he added.
The Permanent Court of Arbitration in Singapore has ordered the government to pay Maynilad about P3.6 billion for losses and damages and recently P7.4 billion to Manila Water.
The water concessionaires separately brought the government to court after the Metropolitan Waterworks and Sewerage System denied their petitions to increase water rates in their respective concession areas and instead reduced the rates.
Duterte even accused the Ayala-owned Manila Water of not paying taxes.
“They do not pay corporate income tax. And the corporate income tax they pass on to people as part of what you pay for the water,” he said.
The Justice department has found a dozen provisions that are deemed onerous and grossly disadvantageous to the government and the consuming public in the 1997 water concession agreements of MWSS with Maynilad Water and Manila Water.
“Most notable were the prohibition against government interference in rate-setting and the provision on indemnity for possible losses in the event of such government interference,” Justice Secretary Menardo Guevarra said after Monday night’s Cabinet meeting where the agreements were discussed.
He said these two provisions were the main factors in the decision of the Permanent Court of Arbitration not only ordering the government to pay Manila Water the multi-billion-peso award but also a previous ruling directing the payment of about P3.6 billion to Maynilad as compensation for losses or damages.
In going through arbitral proceedings, Manila Water cited details of its concession agreement that carried a provision pushing the government to “indemnify” the utility firm against any loss that could result from the regulator’s actions.
As the regulator, the MWSS approves or rejects petitions for water rate adjustments.
The arbitral ruling comes almost three years after the arbitral court also ruled on a similar case filed by Maynilad.
According to Guevarra, the Justice department also found the “extension of these contracts to 2037 irregular, considering that the extension was granted 12 to 13 years before the original expiration of the 25-year concession agreements in 2022.
The Justice department’s review was ordered by President Duterte, but Guevarra said it started even before the ruling of the arbitral court against the government.
“PRRD asked the DOJ to review the concession agreements during the height of the water crisis last summer. However, the matter was not included in the agenda of the Cabinet till last November, and again last night for updates,” Guevarra said.
He said Duterte was “visibly upset, if not angered” by the onerous provisions, and that the President was set to make a public statement on the government’s intended course of action on the matter.
However, Guevarra said he would leave it up to the President to reveal what actions to take.
He said that, during the Cabinet meeting, Solicitor General Jose Calida also made a detailed report on the recent award to Manila Water by the arbitral court and recommended legal remedies. He declined to reveal the details of the action that the government would take.