New water deals will ‘not kill’ utility firms – DOJ

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    JUSTICE Secretary Menardo Guevarra yesterday said the new water contracts with water concessionaires Maynila and Manila will “not kill” the utility firms.

    “That’s a good contract and it is not something that will kill the two water concessionaires,” Guevarra said on ABS-CBN News Channel.

    The drafts, Guevarra added, did away with the onerous provisions of the 1997 concession deals which were highly disadvantageous to the government and water consumers.

    “It will be more equitable. It’s something that will give life, life in the sense that it will be a better contract. You remove all illegal provisions, you put in terms that will be more equitable to the government and to the people so that’s a good contract. It’s not something that will kill the water concessionaires,” he also said.

    The DOJ chief said it will take up to six months to finalize the new contracts, adding the government expects Maynilad and Manila Water to “react” to the new contract within the said timeframe.

    President Duterte on Tuesday told the two utility firms to either accept the terms in the new deals or government will cancel their existing agreements and takeover the operation of the water distribution system in Metro Manila.

    The President also threatened to prosecute officials of the two concessionaires for economic plunder or large-scale estafa.

    A special team from the DOJ, the Office of the Solicitor General, the Office of the Government Corporate Counsel and the Department of Finance have sat down and reviewed the old concession agreements of Maynila and Manila Water after state lawyers found a dozen onerous provisions in the deals, among them the prohibition against government interference in rate-setting and the provision on indemnity for possible losses in the event of such government interference.

    They likewise discovered the questionable and illegal extension of the contracts to 2037 made in 2009, noting that the extension was granted 12 or 13 years before the original expiration of the 25-year concession agreements in 2022.