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Manila Water, Maynilad await gov’t negotiation on new contract

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METRO Manila’s two water providers await the start of negotiations with the government after the Department of Justice confirmed that President Rodrigo R. Duterte approved the proposed contract governing their water concession.

In a mobile phone message, Manila Water Co., Inc. Corporate Strategic Affairs Head Nestor Jeric T. Sevilla said the company would wait for the invitation from the government to start discussions on the amendments to the provisions of their concession agreement.

“We are pleased to learn that President Duterte has approved the proposed changes to the concession agreement. As it has been from the beginning, we remain willing to work with the government in the fervent hope to finally resolve all issues relating to the concession agreement,” Mr. Sevilla said.

He did not respond when asked to comment on the provisions that the east zone water concessionaire plans to negotiate and what are non-negotiable.

“We still need to wait for what exactly are the approved amendments, which I think will be discussed once the discussions commence,” Mr. Sevilla said.

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Meanwhile, Maynilad Water Services, Inc. Head of Corporate Communications Jennifer C. Rufo said the west zone water concessionaire would want to see the new terms first.

“We have not seen the approved contracts. We have to see the government’s terms first, then we start negotiations,” she said in a mobile phone message.

“As far as I know, there is no set date yet on when the negotiations will take place,” she added.

On Wednesday, Justice Secretary Menardo I. Gueverra announced that Mr. Duterte approved the proposed new contract, which removed the supposed onerous provisions in the previous agreement.

Manila Water and Maynilad drew the ire of Mr. Duterte because of these provisions and prompted his order for a review of the water contracts.

In December 2019, the Justice department said it had determined onerous provisions terms stated in the water contracts such as the provision on the non-interference of the government in rate-setting and the liability of the government if the companies suffer losses. Another provision deemed irregular was the extension of their contracts until 2037.

In early November, both water concessionaires decided to waive their respective water rate increases for 2021 under the rate-rebasing adjustment approved by the regulatory office of the Metropolitan Waterworks and Sewerage System (MWSS) as assistance to their customers.

Under the current five-year rebasing period, the MWSS approved a P5.73 per cubic meter increase for Maynilad, while the price hike for Manila Water ranges from P6.22 to P6.55 per cubic meter, to be imposed in tranches from 2018 to 2022.

For next year, Maynilad was supposed to implement a P1.95 per cubic meter increase in its basic charge while Manila Water was set to impose a price hike worth P2 per cubic meter.

Manila Water and Maynilad also opted to forego their rate adjustments for 2020, amid the hearings with the House of Representatives over the same alleged onerous provisions in their 1997 concession agreement with the government. — Revin Mikhael D. Ochave

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