Legaspi Law Offices

SC urged to nullify water deal among MWSS, Manila Water, Maynilad

MANILA, Philippines — A partylist group on Wednesday asked the Supreme Court to nullify the 1997 concession agreement among the Metropolitan Waterworks and Sewerage System, Manila Water Company Incorporated and Maynilad Water Services Incorporated.

In their 57 page petition, the Abakada also asked the high court to declare Manila Water and Maynilad as public utilities subject to the rules and regulations of public service laws and the auditing powers of the Commission on Audit.

Petitioners said concession agreement was extended, disregarding the Republic Act 9184 or the Public Bidding Law. The agreement was extended by 15 years even if the agreement is set to expire in 2022 but with the extension, it will be up to 2037.

“The concession agreements uniformly state that the contracts can be renewed only ‘at the time of expiration’ thereof and not 13 years before their May 6, 2022 expiration dates. Why did Maynilad and Manila Water ask for extensions even while they were in a state of material default? Why did they railroad the contract extension even when many of their biggest projects, all collected in advance, had not even materialized,” the petitioner said.

“These unilateral extensions resulted in the inclusion of 15 years’ worth of concession fees in any present computation of the basis of the rate of return at any given test period hence,” the petition filed by the group’s legal counsel, FLORANTE LEGASPI JR. said. They added that these extensions were done in “grave abuse of discretion amounting to lack or excess of jurisdiction by the MWSS and its Regulatory Office for disregarding public bidding which is the government’s primary method of procurement under Republic Act 9184 or the Government Procurement Reform Act.

The petitioner added that the agreement deserved to be struck down for being “anathema to the Constitution. They also added that the agreement is the basis for Manila Water and Maynilad “in exploiting the rates of water tariffs in their serviced areas.”

Likewise, the petitioner said that the agreements are not ordinary contract but are imbued with public interest as they pointed out that both the Manila Water and Maynilad are engaged in supplying water.

Aside from the partylist group, there are also several groups who already asked that the water firms be declared public utility and be fully regulated by the 12 percent profit cap applicable to public utilities and businesses impressed with public interest.

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