Justice Secretary Menardo Guevarra on Sunday defended President Rodrigo Duterte’s threat to order a military takeover of the operations of the two private water concessionaires in Metro Manila, saying the Chief Executive has authority to do so under the 1987 Constitution.
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“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 said, in a text message.
“These are factual issues that only the President, as chief executive, can determine,” he added.
The President earlier warned of a military takeover of the operations of Maynilad and Manila Waters after the two water concessionaires sued the government—and won P10.8 billion as compensation—before a Singapore-based arbitration court.
The judgment caused President Duterte to rail against onerous concession contracts and threatened to file economic sabotage and plunder cases against the two water concessionaires for milking Filipinos of billions of pesos.
Duterte’s tirades and threats prompted Pangilinan-led Maynilad and Ayala-owned Manila Water to announce that they would no longer collect the P10.8 billion in compensation ordered by the arbitral court, supposedly to cover their losses after the government disallowed them from raising water rates.
Duterte said the government would not pay, and insisted that the agreements with the concessionaires be renegotiated to remove their onerous provisions and to better protect consumers.
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The Metropolitan Waterworks and Sewerage System then revoked the extension of government’s concession agreements with Maynilad and Manila Water, saying this had “no legal basis”—even though it was the MWSS that had extended the contracts in 2009 for another 15 years.
The review of the concession agreements with Maynilad and Manila Waters was initiated after the water distributors implemented rotational supply cuts and rationing amid limited supply, leaving residents in several parts of Metro Manila with dry taps.
On Sunday, Senator Cynthia Villar said she was not aware that her family-owned PrimeWater Infrastructure Corp. planned to offer its services to the government following the controversies houding Manila Water and Maynilad.
She said, howebver, that PrimeWater, run by her eldest son Paolo, was capable of distributing water in areas covered by Manila Water and Maynilad.
She also took a shot at the two concessionaires, saying PrimeWater was not engaged in crafting onerous contracts, and that unlike Manila Water and Maynilad, was not inherited but built up by her husband, former Senator Manny Villar.
“Remember, Manny did not inherit his business. He built it up on his own. Maybe the President was only saying that Manny worked hard to put up his business,” the senator said.
She said Manila Water was an inherited business while owners of Pangilinan and Consunji-led Maynilad came from wealthy families.
Manny Villar, with a net worth of $6.6 billion as of December, was declared the Philippines’ richest man in the Forbes’ 2019 list of the World’s Billionaires. He was ranked 317th richest worldwide.
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The senator also backed the Duterte in demanding for a “fair” water agreement with Maynilad and Manila Water. She also believes the government’s contract with the two were disadvantageous to the people.
The government’s concession contracts with the Ayala-owned Manila Water and the now Pangilinan-led Maynilad were originally signed in 1997 during the administration of former President Fidel Ramos.
While the agreements were set to expire in 2022, the government in 2009 extended them for another 15 years or until 2037. This was done during the presidency of Gloria Macapagal Arroyo, an ally of Duterte.
Also on Sunday, Surigao del Norte Rep. Robert Ace Barbers threatened to recommend the cancellation of the concession agreements between the MWSS and Maynilad and Manila Water.
In an interview over Dobol B sa News TV, Barbers, chairman of the House committee on public accounts, said lawmakers would have no second thoughts about cancelling their agreements if they were shown to be disadvantageous to the state and the people.