Water firms back down

Maynilad, Manila Water to drop arbitral award

THE Manila Water Co. Inc. and Maynilad Water Services Inc. on Tuesday said they would no longer insist on the implementation of the decision of an arbitral tribunal ordering the Philippine government to pay them billions of pesos in penalty amid the threats hurled by President Rodrigo Duterte to fight the ruling and file charges against the water concessionaires over the “onerous” water agreements.

During the hearing of the Committee on Good Government and Public Accountability and the Committee on Public Accounts at the House of Representatives, the chief executives of the water companies announced that they would no longer push for the payment of the monetary award. They also agreed to defer the water rate hikes to be implemented in January 2020 and to negotiate with the government in amending the

“onerous” provisions of their concession agreements.

The President earlier threatened to file plunder complaints against the water companies.

“Susunodpokamisakagu stu hanng go bye rn oatng pa mahala ana tn gP angu lo po ( We will follow the demand of the government and the President),” Manila Water President and Chief Executive Officer Jose Rene Gregory Almendras said when asked by Rep. Michael Defensor on the possibility of scrapping the implementation of the arbitral award.

Maynilad President and Chief Executive Officer Ramoncito Fernandez gave the same assurance.

“Sang-a yo npoka mis a dire k ti ba ho naming ha bu lin‘yung historical arbitral awards a am in ( We agree to the demand of the President; we will not go after the historical arbitral awarded to us),” he said.

The Permanent Court of Arbitration in Singapore ordered the Philippine government to pay P7.3 billion to Manila Water for its losses. In 2017, the tribunal also ordered the government to pay Maynilad P3.4 billion for not allowing the company to raise rates.

Rep. Jose Antonio Sy- Alvarado, chairman of the public accountability panel, said the House initiated a joint probe to assess the current issues surrounding the water situation in Metro Manila.

Meanwhile, the concessionaires said they would not impose higher rates until the water service in Metro Manila and nearby provinces had improved.

“Hindi na mini pa pat up ad angna-aprubahangtaas-singil ngtubigsa ( We will not implement the approved rate hike),” Almendras said, adding that the company would coordinate with the Metropolitan Waterworks and Sewerage System ( MWSS) on how to “mitigate” the increase.

Almendras said the rate increases would allow the company to recover funds spent on programs approved. He added that a rate- rebasing occurs every five years to assess if the programs have been met and if increases are necessary.

“Manila Water felt we do not want to increase until such time that we can restore the service to what it was,” he said.

The National Water Resources Board has reduced the water allocation for Metro Manila because of the receding water level at Angat Dam.

“Puma pay ag poka ming mag delay, kai lang an langp ag-us ap an kung pa pa ano‘yung timing [ and] when, anopoangmga prov is ions,ka si po ang pa g delay aymay implication posa mga investments nakinakailangan ( We agree to the delay, but we need to talk about the timing, when and what are the provisions, because a delay has an implciaiton to the investments needed by) concessionaires [ in] water source, sustainability [ and] Clean Water Act,” Fernandez said.

The water concessionaires also pledged to work with the government in reviewing the concession agreements.

“U pan g mai was anang di pa gk aka un aw a ans ah in a ha rap, makikipag-tulungankamisa MWSS upangmalamanang an gk op na pam amara an para pang-matagalang ugnayan tungosahinaharap ( To avoid misunderstandings in the future, we will coordinate with the MWSS to study the appropriate actions for a long- term relationship in the future),” Almendras said.

Fernandez said his agency is also willing to review the agreement that it inherited in 2007.

Inquiry

Meanwhile, Sen. Francis Tolentino called on the Senate to investigate the water contracts.

He said among the onerous or oppressive provisions of the contracts is Section 9.4, which allows the concessionaires to pass on the payment of its corporate income tax to the consumers.

“These water concessionaires are public utilities and as held in our Supreme Court cases, public utilities are prohibited to recover corporate income tax as operating expenses. As a result, they cannot pass it on to the people.” Tolentino stressed.

He pointed out that the corporate income taxes of these concessionaires have already been shouldered by their consumers. In 2018, the corporate income tax of Maynilad was P2.8 billion and for Manila Water, P2 billion. These were shouldered by their customers, the senator said.

“Tayonaangpinagkaperahan, buwisngtubookitanila ( They made money out of us, we paid the taxes of their incomes or earnings),” he said.

Another contentious provision provides that the government shall not interfere in the setting of rates and connection charges.

The lawmaker expressed hope that the water concessionaires will come upwith an agreement with the government that upholds public interest.