Terminating the contracts between the state-run Metropolitan Waterworks and Sewerage System (MWSS) and water concessionaires Manila Water Co. Inc. and Maynilad Water Services Inc. won’t necessarily improve services, a veteran lawmaker said on Friday.
Rep. Neptali Gonzales 2nd of Mandaluyong, who is assured of retaining his House Majority leader post when Congress opens its First Regular Session on July 22, made the pronouncement in light of the mounting calls for the MWSS to severe its pacts with two water concessionaires, found to be charging their customers of their corporate income taxes by embedding them on their tariffs.
The MWSS pact with the two concessionaires, Gonzales said, granted 30 percent discount to the water dues for non-revenue offices and agencies such as hospitals, city and municipal jails, police stations and public schools.
“Discussions should continue regarding the current issues surrounding the concession agreements of Manila Water Co. Inc. and Maynilad Water Services Inc. and the water tariff setting mechanism provided in these agreements, but it should be done objectively and dispassionately,” Gonzales pointed out in a statement.
Besides the discount, Gonzales said that government deals with the concessionaires have also resulted in faster pace of installation of new water connections because there were 62,382 water connections made since the privatization efforts in 1997.
“Such calls [of terminating contracts]would jeopardize the public-private partnership [PPP] program of the government which is the cornerstone of President Aquino’s administration. PPP’s success depends on the stability and sanctity of contracts entered into by government with private sector investors,” Gonzales added.
Gonzales then cited that private investors made huge investments and assumed significant risks based on an understanding of the resulting financial return to them.
“We have to remember that not even the government can unilaterally vary the financial terms of its contracts without violating the non-impairment clause provided by the Constitution,” Gonzales argued.