Court case vs Maynilad, Manila Water seen to scare off investors

Posted at 07/25/2014 8:51 AM

MANILA - The petition filed before the Supreme Court (SC) seeking to void the concession agreements of state-owned water regulator Metropolitan Waterworks and Sewerage System (MWSS) with Manila Water Co. Inc. and Maynilad Water Systems Inc. is seen to discourage investments in the country, business groups said.

Philippine Chamber of Commerce and Industry (PCCI) president Alfredo Yao said in a telephone interview yesterday moves to question contracts that have been signed by the government with the private sector would affect investor sentiment here.

“That’s a problem here. When a contract is signed, we should honor it. Questioning it will scare investors,” he said.

He said the award of contracts or government projects take time and are not being done overnight.

Management Association of the Philippines (MAP) president Gregorio Navarro shared the same view citing that actions to halt projects affect the country’s image as a place for doing business.

“We are creating a litigious society where anyone can stop or delay a project by going to court,” he said in a text message.

“If the SC were to void the concession which was created in cooperation with the World Bank, nobody in his right mind will invest in long-term contracts with government or PPPs (Public Private Partnership),” European Chamber of Commerce of the Philippines vice president Henry Schumacher said in a text message.

In its petition, the Abakada party-list asked the SC to nullify the resolution of the MWSS Regulatory Office which extended its separate concession agreements for another 15 years or until 2037 with Manila Water and Maynilad.

According to the petitioner, the MWSS’ move to extend the contracts even when these were not to expire until 2022, constitute grave abuse of discretion for disregarding public bidding as the method of procurement under Republic Act 9184 or the Government Procurement Reform Act.

Extensions, the petitioner said, are new contracts which require public bidding.

The party-list group also said the MWSS committed grave abuse of discretion as it delegated is duties to the two firms.

Manila Water provides water and wastewater services for the East Zone of the metropolis, which covers Makati, Mandaluyong, Pasig, Pateros, San Juan, Taguig, Marikina, and most parts of Manila and Quezon City, as well as Rizal.

Maynilad, meanwhile, serves the cities of Manila (all but portions of San Andres and Sta. Ana), Quezon City (west of San Juan River, West Avenue, EDSA, Congressional, Mindanao Avenue, the northern part starting from the districts of the Holy Spirit and Batasan Hills), Makati (west of South Super Highway), Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas and Malabon all in Metro Manila; the cities of Cavite, Bacoor and Imus, and the towns of Kawit, Noveleta and Rosario, all in Cavite province.