Duterte threatens takeover of Manila water firms

MANILA: Philippine President Rodrigo Duterte has threatened a government takeover of the capital’s water services unless its two private utilities accept a new contract, his spokesman said yesterday.

Duterte’s government will offer a deal to replace the one first crafted in the 1990s when Manila’s troubled water system was privatised and which the president calls a “colossal rip-off”, his spokesman Salvador Panelo said.

“Should (utilities) Maynilad and Manila Water refuse to accept the new agreements, the president will order the cancellation of their present water contracts and order the nationalisation of water services in their areas,“Panelo said.

The companies, which serve some 16 million customers, have drawn the president’s ire since they won a roughly US$145 million (RM593 million) arbitration ruling against the government last month over rejected rate increases.

Analyst Calixto Chikiamco warned the offer was “like putting a gun to their (utility operators’) head”, and risked leaving investors wondering if agreements would be unilaterally changed.

“If the outcome is cancellation and nationalisation, that will have a negative impact across the board for foreign investments,“he told local TV.

Duterte has claimed the firms were committing “economic sabotage” with terms they obtained in their 1997 franchises. – AFP