MWSS revokes extension of Maynilad, Manila Water concession

ABS-CBN News

Posted at Dec 11 2019 12:40 PM | Updated as of Dec 11 2019 02:50 PM

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MANILA (UPDATE) - The Philippine capital's water regulator has revoked its earlier decision extending its concession agreements with Maynilad Water Services Inc and Manila Water Co, an official said Wednesday.

The extension was granted in 2009 for Manila Water and in 2010 for Maynilad, years before the original expiration of the agreements in 2022, Justice Secretary Menardo Guevarra earlier said.

The Metropolitan Waterworks and Sewerage System (MWSS) cancelled the extension of its contract with the water distributors in a board meeting last Dec. 5, according to the regulator's deputy administrator for engineering Leonor Cleofas.

"Yun po ang naging aksyon ng board natin nung Dec. 5 board meeting, ni-revoke po yung board resolution po extending the 15 years," she told lawmakers.

Maynilad and Manila Water said they were notified of the revocation of the deals' extension only on Wednesday morning.

"We would like to react that it is with very grave concern that we view this action and we believe also it’s not proper to unilaterally revoke an agreement," Maynilad president and CEO Ramoncito Fernandez told lawmakers.

"Tama po yun, kasi po magmula pa po nung magkaroon ng original extension nung 2009, base po sa approval ay ginawa na po namin yung spending plan that presumes na mababawi po lahat ng investments natin for that extended period of time," Manila Water board member Antonio Aquino said.

(That's right, since the original extension in 2009, we created our spending plan that presumes our investments will be returned for that extended period of time.)

Maynilad and Manila Water were given 3 days from receipt of notice to file their position on the matter, according to Office of the Government Corporate Counsel lawyer Wynard Arcedon.

The cancellation of the extension would mean the lapse of the contract in 2022, foregoing any price adjustments, according to Christopher Chuegan, MWSS Regulatory Office acting deputy administrator for Financial Regulation Area.

The contract maybe offered for bidding to other parties, he said.

Fernandez said failure to extend the concession could result in higher water rates as the distributors need to recover their investments.

“We’re still computing but definitely it will go very high because the rationale of the extension was to mitigate any spikes in tariff o presyo ng tubig because kailangan mag-invest ng concessionaires nang mas malaki (or price of water because concessionaires need to invest more)," Fernandez said. -- with reports from RG Cruz, ABS-CBN News