Metropolitan Waterworks and Sewerage System (MWSS) Chairman and Acting Administrator Reynaldo V. Velasco said the new concession agreement between the government and the Maynilad Water Services, Inc. is “a big step towards water supply security.”
“It’s a win-win for all stakeholders,” Velasco said in a statement on Wednesday. “Public-private partnership is still the best option for water infrastructure projects.”
He expressed optimism that with the new agreement signed on May 18, various water security projects can now move forward smoothly.
Under the new agreement, Maynilad’s capital expenditure projects will rehabilitate and replace old pipelines, install new pipes in unserved areas, construct new pumping stations, reservoirs and treatment facilities, among others that will result in better service to its customers.
The signing came closely after the government signed a renegotiated concession agreement with Ayala-led Manila Water Company Inc. earlier this year.
With the signing of the new agreement, Maynilad will impose a tariff freeze until Dec. 31, 2022.
It will also forego collecting the P3.4 billion compensation from the government. The Permanent Court of Arbitration in Singapore has ordered the Philippine government to pay for the losses incurred by Maynilad because of the prior’s refusal to approve a water rate hike.
Following the template of the new Manila Water concession agreement, the new Maynilad concession agreement eliminated onerous provisions detrimental to the interests of the government and the consumers even as it guarantees the economic viability of the concessionaire’s capital investments.
Earlier, Justice Secretary Menardo Guevarra, head of the panel that reviewed the concession agreements of Manila Water and Maynilad, said onerous provisions such as the non-interference clause, and burdening consumers with corporate income tax were removed.
Contingent liabilities of the government have been substantially reduced, and a framework for better service to the public has been put in place.
The revised concession agreement was reached following a thorough review and negotiations conducted by a government panel led by the Department of Justice based on an order from President Rodrigo R. Duterte last year.
The 1997 concession agreements with water concessionaires Manila Water Services, Inc. and Maynilad Water Company were signed and took effect during the Ramos administration ushering a private-public partnership for the water sector.
The 25-year 1997 concession agreements supposedly to expire in 2022 were extended for another 15 years pursuant to MWSS Board Resolutions in 2008 and 2009 during the incumbency of President Gloria Macapagal-Arroyo. SOVEREIGNPH