Gov't won't pay compensation to water concessionaires - Malacanang

The government has announced that it will not pay water concessionaires Maynilad Water Services, Inc. and Manila Water Co. billions of pesos worth of compensation despite the ruling of the Permanent Court of Arbitration in Singapore.

Presidential Legal Counsel and Presidential Spokesperson Atty. Salvador Panelo reiterated that the government would not acknowledge the ruling because it is based on "onerous" contracts.

“Hindi kasi nga onerous ang kontrata. Masyadong disadvantageous sa gobyerno (No, we won’t pay them because the contracts are onerous. It’s too disadvantageous to the government),” Panelo said in an interview.

(photo credit to owner)

 “Meron tinatawag na mga kontratang labag sa public policy. Pag ‘yan ay napatunayan ng hukuman, 'yan ay ina-annul (There are contracts that are against public policy. If we can prove that in court, it will be annulled),” he added.

Panelo lamented how the privatization of water distribution in 1997 was “unfair” and “one-sided.”

“Nagiging problema kasi nga yung mga kumakatawan sa gobyerno hindi interes ng kanilang pinaglilingkuran, interes ng kabila kaya ganyan ang nangyayari (The problem is representatives of the government are not considering public interest but personal interest. That’s why this is happening),” he said. “Yung kontrata nakalagay dun pag sila’y nalugi for whatever reason e kailangang bayaran natin sila. Saan ka naman nakakita (The contract says that if the water concessionaires acquire losses for whatever reason, the government has to pay. Where did you see such a contract)?”

The Permanent Court of Arbitration in Singapore has ordered the Philippine government to pay about PHP3.6 billion to Maynilad and recently, PHP7.4 billion to Manila Water for the non-implementation of water rate increases and compensation for losses and damages, respectively.

Manila Water is a subsidiary of the Ayala Corp. while businessman Manuel V. Pangilinan’s Metro Pacific Investments Corp. owns a controlling stake in Maynilad.

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Report from PNA