Duterte threatens to sue water firms for economic sabotage

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    BY JOCELYN MONTEMAYOR AND ASHZEL HACHERO

    PRESIDENT Duterte yesterday threatened to order the arrest and file economic sabotage charges against top officials of water firms Manila Water Company and Maynilad Water Services over the supposed onerous and disadvantageous provisions in their concession agreements with the Metropolitan Waterworks and Sewerage System (MWSS).

    “Ito ipa-file ko ito, economic sabotage and I will arrest them, lahat sila…ipatikim ko sa kanila ang buhay ng preso (I will economic sabotage and I will arrest them all. I will let them taste the life of a prisoner),” Duterte said in a speech during the signing ceremony for the Malasakit Center Act and the law postponing the 2020 barangay and Sangguniang Kabataan elections in Malacañang.

    The President made the statement following a recent decision of the Permanent Court of Arbitration in Singapore ordering the Philippine government to pay P7.4 billion to Manila Water for the losses it incurred after the MWSS rejected its proposed water rate hike back in 2015.

    The Singapore arbitral court had also previously ordered the government to pay Maynilad the amount of P3.6 billion as compensation for losses or damages.

    Duterte said that while he had committed to assist the business sector in dealing with corrupt government officials or employees, it does not mean that he would agree to abuses committed against Filipinos.

    Duterte likewise said he wants to sit-down with the Ayalas, the owners of Manila Water, whom he said have not been paying the correct corporate income taxes to the government.

    Also during the signing of the new laws, President Duterte ordered Finance Secretary Carlos Dominguez III and Solicitor General Jose Calida to draft new water concessionaire agreements that are favorable to the Filipinos and the government.

    “Sabi ko kay Dominguez pati kay Calida, draft a new contact that is really favorable to public, to government. Bigay mo sa kanila. This is the amended contract. Accept it, or nothing (I told Domingez and Calida to draft a new contact that is really favorable to public and to the government. Give it to them. This is the amended contract. Accept it, or nothing),” Duterte said.

    Duterte said he is prepared to assume responsibility for the amended contracts and even go down for insisting on the revisions.

    ONEROUS AND DISADVANTAGEOUS

    Justice Secretary Menardo Guevarra had reported to Malacañang that the 1997 water concession agreements of the MWSS with the Maynilad Water Services and Manila Water were replete with onerous and disadvantageous provisions to the government and the consuming public.

    The report was the result of a review conducted by the Department of Justice of the water deals on orders of Duterte.

    “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,” Guevarra said.

    Guevarra said the DOJ also found the “extension of these (concession agreement) contracts until 2037 irregular, considering that the extensions were granted 12 to 13 years before the original expiration of the 25-year concession agreements in 2022.

    Guevarra said the twin provisions on government interference and indemnification were the main arguments raised by Manila Water in the case it filed and won before the Permanent Court of Arbitration in Singapore.

    In seeking the international court’s intervention, Manila Water cited details of its concession agreement which carried a provision that pushed the government to “indemnify” the utility firm against any loss that could result from any actions of the MWSS.

    The two provisions were likewise cited by the Maynilad when it sought, and won, its P3.6 billion compensation case also before the Singapore arbitral court.

    Guevarra said the DOJ review started way before the ruling of the Singapore court against the government was issued.

    “PRRD (President Duterte) 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 until last November, and again last night for updates,” he said.

    He added that Duterte was “visibly upset, if not angered” by the onerous provisions, adding that he is set to make a public statement on the government’s intended course of action on the matter.

    The DOJ chief said he will leave it to the President to decide on the legal team’s next cause of action.

    “Out of deference to the President, I will not preempt him in declaring the government’s position and course of action. I think he will say something today,’ Guevarra said.

    During Monday night’s Cabinet meeting, Calida recommended possible legal strategies to address the ruling of the Singapore court.

    “Out of deference to the President, I will not preempt him in declaring the government’s position and course of action. I think he will say something today,’ Guevarra added.