The signing of a revised concession agreement between the government and Maynilad Water Services Inc. will finally allow the latter to move forward with its several planned water infrastructure projects, according to the Metropolitan Waterworks and Sewerage System (MWSS)
In a statement, Reynaldo Velasco, MWSS chairman and acting administrator, said the agreement is “a big step towards water security” especially that “public-private partnership is still the best option for water infrastructure projects at this time.” Maynilad’s projects involve the rehabilitation and replacement of old pipelines, installation of new pipes in unserved areas as well as construction of new pumping stations, reservoirs and treatment facilities.
Justice Secretary Menardo Guevara, head of the panel that reviewed the concession agreements of both Manila Water and Maynilad, said onerous provisions such as the non-interference clause and burdening consumers with corporate income taxes were removed.
In a disclosure to the Philippine Stock Exchange, Maynilad majority owner Metro Pacific Investments Corp., said the revised concession signed on Tuesday confirms the continuation of the concession period until July 31, 2037 and an imposition of a tariff freeze until Dec.31, 2022. It also corporate income tax from Maynilad’s recoverable expenditures as well as the foreign currency differential adjustment and capped the annual inflation factor to 2/3 of the consumer price index and the rate for water and sewerage services to 1.3x and 1.5x, respectively, of the previous standard rate.
The deal also means Maynilad is foregoing the collection of the P3.4- billion compensation from the government that rooted from the Permanent Court of Arbitration in Singapore’s order for the Philippine government to pay for the losses incurred by Maynilad because of the former’s refusal to approve a water rate hike..
