The Metropolitan Waterworks and Sewerage System (MWSS) today announced in a House of Representatives hearing that it has unilaterally canceled a previously agreed-upon extension of the government’s contract with water concessionaires Manila Water and Maynilad.
The abrupt cancellation means that instead of the contracts ending in 2037, they will end in 2022. The contracts were first signed in 1997, under the administration of then-President Fidel Ramos, and the extension was approved in 2009 under then-President Gloria Macapagal-Arroyo’s term, Rappler reports. Now, new concessionaires may come in after 2022.
The news comes after President Rodrigo Duterte launched a sustained public broadside against the companies for allegedly “screwing” the country, and just a day after the companies — under withering attack from the president — hastily agreed to drop their claims to billions of pesos they are legally owed in compensation by the government.
Deputy Administrator for Engineering Leonor Cleofas of the MWSS said the cancellation of the extension was based on Duterte’s directive and that the decision was made during a board meeting last Friday, The Philippine Daily Inquirer reports. Representatives of Maynilad and Manila Water received the notice of revocation just a few hours ago.
During the congressional hearing, Maynilad CEO Mon Fernandez warned that should the contracts be dropped, prices “will definitely go very high, because the rationale of the extension at that time is to mitigate spikes in tariffs because the concessionaires had to invest more.”
“It is with very grave concern that we view this action. It is not proper to unilaterally revoke an agreement,” he added.
Duterte’s campaign against the concessionaires — whose contracts he characterized as onerous — came after a Singapore arbitration court ordered his administration to pay Manila Water PHP7.39 billion (US$144 million) to compensate it for losses suffered between June 2015 and November 2019. Last year, the same court ordered the government to pay Maynilad PHP3.4 billion (US$66.5 million) for the same reason. Both companies had suffered the losses because the government had forbidden them from raising rates.
However, in a surprise turnaround, both companies announced yesterday that they would no longer demand the Duterte administration pay them what they are owed.
While the government is responsible for managing the country’s dams, the two water concessionaires are responsible for treating and delivering the water to consumers. Maynilad is responsible for servicing the western area of Metro Manila, while Manila Water serves the eastern section and the nearby province of Rizal.
This article, Time To Say Goodbye: MWSS cancels extension of Manila Water, Maynilad contracts, originally appeared on Coconuts, Asia's leading alternative media company. Want more Coconuts? Sign up for our newsletters!