PRESIDENT Duterte yesterday said government will not enter into any compromise with water utility firms Maynilad Water and Manila Water Company in connection with the compensation awarded by the Permanent Court of Arbitration (PCA) of Singapore.
“Paano mo aregluhin iyan ngayon? They say na, ‘aregluhin natin’ How? How will I compromise? That’s plunder. That is the classic economic plunder (How can you settle that?
They say, ‘let’s compromise.’ How? How will I compromise? That’s plunder. That is the classic economic plunder),” Duterte said in a speech during the oath-taking ceremonies of newly promoted officials of the Armed Forces and the PNP in Malacañang.
The President said he made his position clear when he discussed the compensation issue with his Cabinet secretaries.
Duterte stressed the concession agreements with the two firms violated the Anti-Graft and Corrupt Practices law.
“Iyung kontrata itself is a mirror of the Anti-Graft and Corrupt Practices law (The contract itself is a mirror of the Anti-Graft and Corrupt Practices law),” he said adding that all provisions of the law were violated by the contract which is why those who crafted the agreement are now fearful after they had been discovered.
Duterte said he wants to meet with officials of the concessionaires as well as those involved in the crafting of the agreements, including the lawyers.
He even joked that he would ask Armed Force Chief of Staff General Noel Clement to join the said meeting and to bring two M16 rifles which he can use to shoot and kill them.
In his speech, the President also chided the two water companies for allegedly passing on the corporate income tax to consumers and also for supposedly abusing the advantages included in the deals.
He reiterated that the agreements were “onerous” and “disadvantageous” to the government and the country.
Among the questionable provisions were the prohibition against government’s interference in rate-setting and the provision on indemnity for possible losses in the event of such government interference.
The twin provisions were cited by Maynilad and Manila Water when they hauled the Philippine government before the PCA, and these were likewise the basis used by the arbitral court in awarding damages to the utility firms.
Justice Secretary Menardo Guevarra said the government will come up with its version of the water concession agreements with the Maynilad and Manila Water.
Guevarra said they are now forming a team composed of lawyers from the Department of Justice (DOJ), the Office of the Solicitor General (OSG), the Office of the Government Corporate Counsel (OGCC) and the Department of Finance (DOF) to come up with a revised concession agreement.
He said the team might be able to come up with an agreement before the end of this year.
“We are still forming our team who will come up with a government version of the concession agreement so we’ll be able hopefully to come up with a revised version of the agreement that does not include the onerous and what we consider as illegal provisions,” Guevarra said.
“Hopefully, before the year is over we can have one,” he added.
Guevarra said the team will do their job without the input from the water concessionaires, adding the government will sit down with Maynilad and Manila Water once the revised version is completed.
“We will do it within the government first and once we are ready with our own version of what a good water concession agreement should be, that’s the time we will sit down with the water concessionaires,” he said.
Guevarra clarified yesterday that not all provisions in the agreements were disadvantageous to the government and the public.
He said it will now be the task of government lawyers from the DOJ, OSG, OGCC and the DOF to weed out the onerous provisions.
“It’s just a matter of wedding out those provisions which we consider as onerous or highly disadvantageous. But the rest of the agreement could stand. There’s no problem with that.
We are just trying to remove those provisions which should be removed, not favorable to the people or the consuming public,” Guevarra said.
Asked if the government is ready to take over the provision of water services if it such is affected by the legal wrangling, Guevarra said the government is prepared to do just that.
“Are you saying they will stop supplying water? If that’s the case, then the government will have to take over if necessary. But I don’t think we will not get to that point when water supply in Metro Manila will be stopped simply because of this problem,” Guevarra said.
He remained confidence that the issue will be resolved, especially since the water companies have already signified their willingness to sit down with the government to discuss the issue.
“I don’t have any reason to believe that we should be worried about stoppage of water supply. This is a problem that can be solved,” he said.
Sen. Aquilino Pimentel III, chair of the Senate committee on trade, commerce, and entrepreneurship, said the Duterte administration should not honor the agreement entered into by the Arroyo administration extending the services of the two water concessionaires up to 2037.
Pimentel said the extension should be considered null and void since extension or renewal of the contracts should only be done when the original contracts expire, which is still in 2022.
Pimentel noted that the service extension contracts for the two water concessionaires were done in 2010, or months before the Aquino administration took over in June 30, 2010.
“Para sa akin, ‘yung agreement to extend ay hindi pa effective kasi hindi pa naman nag-e-expire (ang original contract). So sa akin, puwede i-disregard ‘yun ng Duterte administration kasi pinasok ‘yun ng ibang administration at pinasok sa gitna ng original lifetime. Meron bang nag-e-extend sa gitna ng original lifetime ng kontrata? (For me, the agreement to extend their services is not yet effective because the original contract has not yet expired. To me, the Duterte administration can disregard the service extension as it was entered into by another administration which was done in the middle of the original lifetime contract. Is there anyone who will extend a contract in the middle of an original lifetime contract?),” Pimentel said.
“So, therefore, kung hindi pa ‘yan implemented, puwede pa siyang i-disregard ng Duterte administration. (So, therefore, if that contract has not been implemented, the Duterte administration can disregard it),” he added.
Pimental said he will leave it to Guevarra to determine if the service extension contracts for Maynilad and Manila Water are illegal or not.
He said the administration can nullify the water suppliers’ contracts but it is better to just wait until the original contract expires in 2022 since doing so will mean having legal issues.
Once the contract nears expiration, Pimentel said the government can look for other water suppliers and lay down new conditions.
He said Maynilad and Manila Water can still re-apply but cautioned that the two water concessionaires must not think that they still have a lock-in period for their services until 2037.
“The search will begin (either) in 2020, 2021, 2022. Announce early the terms of the new concession agreement lahat ‘yun pati (everything including the) standards pati (including) fees etc, the mechanics, arrangement, grievance procedure. Announce early then open up the application or the search for the new concessionaires. The present one can still apply,” Pimental said.
Duterte blasted the Arroyo and Aquino administrations for not acting on onerous provisions of the water concession agreements.
The President said the two previous administrations had allowed the country’s sovereignty to be surrendered through the contracts.
“Malas tayo. Dalawang administrasyon na. At hindi mo akalain na… kaya gusto ko silang makausap. Hindi ito maareglo hangga’t hindi ko makausap iyung mga concessionaires. Gusto ko harap ang abogado ng gobyerno na p********** gumawa ng kontrata na ito (We are unlucky, two administrations. We did not expect, that’s why I want to talk to them. This will not be settled if I do not talk to the concessionaires. I want to meet the lawyers of the government, those sons of b****** who made the contracts),” Duterte said. – With Ashzel Hachero and Raymond Africa