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Water companies face Senate wringer

The Senate has been asked to investigate the concession contracts of two private water utilities that the government says contains onerous provisions.

Senate Resolution 259, filed by Senator Imee Marcos, seeks to examine the provisions of the concession agreements and why the water companies failed to meet their public service obligations.

The water companies drew the ire of President Rodrigo Duterte after they sued the government and were awarded P10 billion by a Singapore-based arbitration court for losses they claimed to suffer because they were not allowed to raise their rates.

Senator Imee Marcos
Marcos said Manila Water and Maynilad have failed to live up to their commitments to ensure an uninterrupted supply of drinking-quality water “not later than June 30, 2000,” or three years after the government privatized water services.

On the contrary, daily water interruptions since October have become the rule rather than the exception, Marcos said.

Marcos also called out the apparent “social inequality” in water rationing schedules imposed by Manila Water and Maynilad.

Many exclusive residential villages in Metro Manila have only four-hour interruptions starting late at night, while lower-income areas in Quezon City, Caloocan, Valenzuela, Manila, and the neighboring cities of Bacoor and Imus in Cavite have 19-hour to 21-hour interruptions that run through the day, Marcos said.

By their own admission, Manila Water and Maynilad have also failed to install adequate sewage treatment systems, causing 86 percent of wastewater to continue spilling untreated into rivers and bays, Marcos said.

Senate Resolution 259’s inquiry in aid of legislation also seeks to better craft concession agreements in the future, Marcos said.

Senator Sherwin Gatchalian, meanwhile, called for the renegotiating of the concession agreements between the two companies and the Metropolitan Waterworks and Sewerage System, saying the two private contractors violated the public trust.

During the Senate public services committee hearing on the creation of a Water Regulatory

Commission, Gatchalian hit officials of Manila Water and Maynilad for passing on to consumers company expenses that are not related to water distribution, such as charitable contributions, expenses for basketball games, sports clinics and other forms of donations.

Gatchalian also slammed the water companies for overestimating the cost of their projects which he said will be the burden of every Filipino.

He also questioned a provision in their concession agreements that enable the two companies to skirt their tax obligations.

MWSS has just revoked the extension of concession agreements with both water concessionaires until 2037 which the water regulator itself approved in a board resolution in 2009. The revocation in effect ends the water firms’ concession in 2022.

Justice Secretary Menardo Guevarra on Thursday said the government is looking at the possibility of renegotiating the concession agreements before end of 2019.

“We’re hoping to start this renegotiation before the end of the year,” Guevarra said in a text message.

“The government side is still working on the proposed amendments. Once this is completed, we’ll sit down with the water concessionaires to discuss,” he added.

Under the existing concession agreements with Manila Water and Maynilad, the government is prohibited from interfering in rate-setting and contain an indemnity clause in case of such interference.

The companies have signified their willingness to sit down with the government for a concession review.

However, the concessionaires warned of the possibility that more than 100-percent water rate increase after the MWSS revoked a resolution that approved the extension of the concession agreements to 2037.

But Deputy Speaker Prospero Pichay Jr. said the revocation of the agreement extension would give the companies a chance to renegotiate the contracts.

Also on Thursday, Guevarra cleared Justice Undersecretary Emmeline Aglipay-Villar of insinuations that she had a personal agenda in reviewing the concession agreement with Maynilad and Manila Water Services because her in-laws own Prime Water Infrastruture Corp., which might be tapped to take over the operations of the two concessionaires.

Guevarra said Villar’s participation in the review was purely coincidental.

Villar is married to Public Works Secretary Mark Villar, who is a son of businessman and former Senator Manuel Villar and Senator Cynthia Villar. Their family owns Prime Water.

“I don’t know who may be giving a spin to this,” Guevarra said.

Topics: Senate , Senate Resolution 259 , Senator Imee Marcos , Manila Water , Maynilad
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