Metro Pacific Investments Corp. (MPIC) is ready to negotiate with the government over its concession in water distribution but hopes the latter would ensure the commercial viability of the business.
Jose Ma. Lim, MPIC president, said the company’s unit Maynilad Water Services Inc. has yet to receive any new terms from government following President Duterte’s recent pronouncement he was willing to talk with Maynilad and Manila Water Corp., concessionaires for west and east zones, respectively.
Duterte said he was ready to talk to the water companies’ respective owners, MPIC and Ayala Corp.
In the past, Duterte had threatened the concessionaires government will take over the operation of the water distribution business if they decline the new terms of contract his administration is offering to Maynilad and Manila Water.
He even threatened to send to jail the business tycoons who own Metro Pacific and Ayala.
Last week, however, Duterte apologized to the “Ayalas and Pangilinan for the “hurting words” he uttered.
“We haven’t received (the terms) officially but we note that what the president said is very reasonable. and I think the key to the committee members… and for us what reasonable means that the concession remains bankable and the commitments we’ve made in respect to loans we’ve taken from various banks can be serviced property under the new terms and conditions moving forward,” said Lim, adding the environment for negotiation going forward looks “very promising at this point in time at least.”
“We are waiting for those terms. But in the meantime we’re expecting with the relationship with the water concessionaires now, the members of that committee – Department of Finance, Department of Justice, Office of the Solicitor General, Office of the Government Corporate Counsel, and National Economic Development Authority – will be more objective and not so pressured to insist on the original terms we are hearing,” he added.
Lim said hopefully if there’s a change in the terms, Metro Pacific is “willing to pay our taxes” but hopes that the government will give a “commensurate pre-tax yield that will allow us to pay those taxes.”
“Because the way the concessions were originally structured, the yield that we were allowed to charge excluded all the taxes paid to the government. So if there is… there is to be commensurately adjusted in terms of tariff,” he said.
Maynilad and Manila Water first won the concessions in 1997, during the term of President Fidel Ramos, as part of the government assets privatization move.
The concessions were to end in 2022 but in 2009, Arroyo approved the contracts’ extension to 2037, which gained the ire of President Duterte
