Arbitral court tells PH gov't to pay ₱7.4B to Manila Water

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Manila Water secures a big win from the Permanent Court of Arbitration, which ruled that the Philippine government must pay over ₱7 billion to the utility firm for refusing to raise water rates for four years.

Metro Manila (CNN Philippines, November 29) — Manila Water secured a major victory before an international tribunal as it demanded the Philippine government to pay losses stemming from rejected water rate hikes back in 2015.

In a disclosure, the Ayala-owned water concessionaire said it has received an award granted by a tribunal backed by the Permanent Court of Arbitration (PCA) ordering the national government to pay ₱7.39 billion to Manila Water.

"The Tribunal ordered the Republic to indemnify Manila Water the amount of ₱7,390,000,000 representing the actual losses it suffered from 1 June 2015 until 22 November 2019," the supplier of Metro Manila's east zone said in a disclosure on Friday.

The listed company said the tribunal also ordered the state to pay 100 percent of the amounts paid by Manila Water to the PCA and 85 percent of Manila Water’s other claimed costs.

Manila Water cited details of its concession agreement with the Metropolitan Waterworks and Sewerage System (MWSS) back in 1997 which carried a provision that pushes the government to "indemnify" the utility firm against any loss that could result from the regulator's actions.

As regulator, the MWSS approves or rejects petitions for water rate adjustments.

Manila Water brought the Philippine government to court when the MWSS rejected its request to raise water rates for 2013 to 2017, instead telling the utility firm to slash its basic water charge by ₱2.77 per cubic meter.

The ruling comes almost three years after the PCA ruled on a similar case filed by west zone concessionaire Maynilad Water Services, Inc. The court has ordered the state to reimburse ₱3.4 billion for Maynilad's losses from March 2015 to August 2016.