Contract extension beyond 2022 still stands, Manila Water clarifies

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Metro Manila’s water concessionaires may still provide services after 2022, east zone concessionaire Manila Water said. (FILE PHOTO)

Metro Manila (CNN Philippines, December 13) — Metro Manila’s water concessionaires may still provide services after 2022, east zone concessionaire Manila Water said.

In a disclosure to the Philippine Stock Exchange Wednesday, Manila Water Company, Inc. said it received a letter from the Metropolitan Waterworks and Sewerage System (MWSS) informing the firm that the regulatory board revoked a resolution on the extension of the concession agreement. However, Manila Water clarified that the contact extension stands.

"...the MWSS Board of Trustees Resolution No. 2019-201-CO revoked the prior MWSS Board of Trustees Resolution No. 2009-072-CO. The MWSS Board of Trustees Resolution No. 2019-201-CO does not revoke the extension of our Concession Agreement with MWSS from 2022 to 2037,” said Manila Water.

The extension of the concession agreement for 15 years as stated in a memorandum of agreement and confirmation was executed in October 2009, and Manila Water said it was approved by the President at the time.

Manila Water received the MWSS letter on Wednesday and has three days to reply.

From a legal perspective, Integrated Bar of the Philippines president Domingo Cayosa also said revoking the board resolution does not mean cancellation of the contract extension.

“The unilateral board resolution cannot cancel a mutually agreed contract...I suppose by doing that, nagpapahayag ang current administrators na sa tingin nila hindi dapat ganoon," told CNN Philippines.

[I suppose by doing that, the administration is expressing its sentiments against the terms of the concession agreement.]

He added that cancelling the contract might be raised before a court or the speedier way -- a negotiation.

Para sa reasonable na mabilis at magkaroon ng win-win situation,” said Cayosa.

[Translation: For it to be reasonable and fast and to have a win-win situation.]

Both concessionaires earlier said they are open for a review of the concession agreement, but President Rodrigo Duterte has rejected this. Water concessionaires did not want to comment on the issue. The MWSS board met on Friday.

In a separate disclosure, Manila Water said it will not press claims worth ₱7.39 billion against the government in line with arbitration proceedings in Singapore.

It added that it will also defer its rate adjustment scheduled for January 1, 2020 as it seeks to to establish a suitable arrangement with MWSS.

Further, Manila Water said it has begun discussions with the regulator on the provisions of the concession agreement identified for renegotiation and amendment.

CNN Philippines' Correspondent Carolyn Bonquin contributed to this report.