THE Manila Water and Metropolitan Waterworks and Sewerage System (MWSS) has signed a revised concession agreement with the Manila Water, which Malacañang said is now more favorable to consumers and the government.
Presidential spokesman Harry Roque yesterday presented some of the salient features of the new agreement, which he said was inked between the MWSS and Manila Water last week.
Provisions of the new concession deal were reviewed by the Department of Justice, which President Duterte had earlier tasked to review the old concession agreements that the government had with Manila Water Maynilad for alleged onerous provisions that were unfavorable to the government.
Roque said that in the new Manila Water-MWSS deal, the water company agreed to delete the clause on government’s non-interference, which means it will no longer be held liable when fulfilling its regulatory functions to protect the consumer.
The agreement likewise recognized Manila Water as a public utility and made it more accountable to the government and the public.
Roque said the new accord also features the “removal and addition of provisions that unduly compromise medium and long term government liabilities,” such as the deletion of the provision on the government’s performance undertaking for future debts.
The deal also allowed for a review and approval by a regulatory office, the immediate transfer to the government of all fully recovered assets to ensure there is no double payment at the end of the contract, and limiting the Material Government Adverse Action (MAGA) to actions of the Executive to avoid National Government form being held liable for things outside of its control.
Manila Water Co. Inc. said the key features of its revised concession agreement (CA) with the government included improved policies to protect consumers.
In a disclosure to the Philippine Stock Exchange, the company said the revised document removed the recovery of corporate income taxes and adjustments for foreign currency differential.
To mitigate its impact on customers, the inflation factor to be used was adjusted to 2/3 of the consumer price index adjustment as caps were also imposed on increases in standard rates for water that was previously at 1.3 and wastewater that was formerly at 1.5.
“Instead of a market-driven appropriate discount rate, Manila Water shall now be limited to a 12 percent fixed nominal discount rate,” the company said.
The water concessionaire also said that the revised CA included a tariff freeze until December 31, 2022 to assist the disadvantaged sector and to contribute to the recovery of the economy post-pandemic.
The agreement will be in effect until July 31, 2037. – With Jed Macapagal