Why we should review government contracts thoroughly
Photo of a wash basin reflects our desire for proper water services, with the alleged onerous provisions

In light of water supply contracts being called out by President Duterte, there is a need to review future similar contracts carefully.

Merriam Webster defined onerous as involving, imposing, or constituting a burden, TROUBLESOME or having legal obligations that outweigh the advantages.

In the recent statements by the President against Metro Manila water concessionaires Manila Water and Maynilad Water Services following their victory in the Singapore based Permanent Court of Arbitration, the word onerous has been used to describe the water distribution contracts entered into more than 20 years ago.

Whether or not they are indeed onerous may be debatable, but the particular bone of contention is whether the contracts provisions disallow government from "interfering" in rate setting that supposedly forced the two companies to incur losses.

From what we gather, these two companies water rates are set and approved by government through the Metro Manila Waterworks and Sewerage System (MWSS). These companies file the necessary petition for rate increases which are then deliberated upon and approved. Is this the "interference" being referred to?

The second question to answer is whether losses were indeed incurred or whether these simply represent unrealized additional income?

Answering whether government actually interfered or if losses were indeed incurred by Maynilad and Manila Water will probably be known as the story develops, but to a third question our answer is clear: government must thoroughly review all contracts involving the provision of utilities and services, and this includes infrastructure such as ports and airports.

In particular we should watch the development of the Manila Subway, Sangley Point and Bulacan airports. These are flagship projects which should provide efficient and affordable service to the public. We trust that the government, including the Departments of Justice and Finance will review these contracts thoroughly to ensure that these are not onerous.