President Duterte: Manila Water and Maynilad shareholders committed syndicated estafa

President Duterte: Manila Water and Maynilad shareholders committed syndicated estafa

- in Philippines

President Rodrigo Duterte’s vocal criticism of Metro Manila water concessionaires Manila Water and Maynilad is nowhere near through. While speaking before quake victims in Digos City, President Duterte said the main shareholders of the private water firms, the Ayala and Pangilinan families, committed “syndicated estafa” through the onerous provisions in their contracts with the government.

Speaking of corruption and oligarchies, President Duterte dropped the names of the two families. Both the Ayalas and Pangilinans head mulimillion peso conglomerates and count themselves among the country’s richest. The Ayala group of companies owns Manila Water and Maynilad is jointly owned by DMCI Holdings and Manny Pangilinan’s Metro Pacific Investments Corp.

“Yang nagtatanong kayo, ‘Saan ‘yung big fish? Saan ‘yung mga corruption? Saan ‘yung malalaki?’ O i-deliver ko na sa inyo ngayon: si Ayala pati si Pangilinan,” Duterte said. 

“Kita mo, maski anong insulto ko hindi… hindi na sumasagot. Sigurado, swak sila. Syndicated estafa.”

President Duterte said the water concessionaire contracts enjoyed by both companies violate the country’s anti-corruption and anti-corruption laws. On this basis, President Duterte said they were “null and void” from the start. 

Provisions which prohibit the Philippine government from setting water rates and allow these companies to pass taxes or penalties on to consumers have earned President Duterte’s criticism and rage. A P10.8 B compensation award was granted to them by a Singapore-based arbitration court, to be paid by the Philippine government as penalty for attempting to control soaring water rates. While both companies have since waved their award, their raising of the issue to a third-party arbitration court shows how much they care only about their bottom line. If the President hadn’t stepped in and put his foot down, these companies would have continued taking advantage of consumers like usual.

The Chief Executive has told the water concessionaires that they need to accept new contracts which have fairer, more pro-consumer terms.

However, some members of the cabinet reportedly advised him to simply renegotiate the contracts with Manila Water and Maynilad. Both contracts for the concessionaires are set to end in 2022.

“Sabi ko, ‘There is nothing to negotiate a contract that is null and void from the very beginning.’ Because in that contract, the Philippines agreed to waive sovereignty. You cannot do it,” he said. 

The House of Representatives began their investigations into the irregularities in the concession contracts of Maynilad and Manila Water in December 2019. House Speaker Alan Peter Cayetano urged the water utility firms to waive their P10.8 B award, which they ultimately did shortly after the investigation began.

The House investigation is set to continue with the resumption of the session next week.

Speaker Cayetano said he hopes the government’s new contracts for Manila Water and Maynilad will be ready by the first quarter of 2020, which will allow all stakeholders to map our long-term solutions to address the issues in the water industry, like shortages and supply interruptions. While solving the onerous provisions is a big step in the right direction, the government and the water concessionaires need to know their new agreement as soon as possible in order to plan solutions to Metro Manila’s problematic water supply.

“I am fully supportive of the President na baguhin ang kontrata. I am thankful that the two water concessionaires already said they are willing to talk and look at it. I just hope that the new contracts will come out by first quarter of this year and all will agree.” Speaker Cayetano said.

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