Apologies and the water deal gone sour
Photo: Philippines Justice Secretary Menardo Guevara (wikipedia)

The apology by Manila Water and their company`s decision not to collect the funds awarded to them by the Singapore based arbitral court laeft a bad taste in the mouth, leading many to think that the MWSS concessions are indeed onerous. That they seek to continue providing the service despite foregoing the awarded amount and not seeking a rise in water rates belies claims by others that they are losing money. Had losses been the real reason as many seem to claim to justify the arbitral award, they should have surrendered the concession by this time.

Despite this, some foreign business groups stubbornly retreat to the mantra of "sanctity of contracts" , warning the government that the cancellation of the MWSS deal will have repercussions in the investor community, citing it as "political risk", parlaying a tendency to try to make political hay out of business deals to shore up their own bargaining position. If they read the actual contracts, would they think of them as sacred?

Will they agree to "sanctify"onerous contracts?

We respectfully disagree with some of these groups.

We hold the position that this does not constiute "political risk" when onerous contracts are corrected.

To this, Philippine Justice Secretary Menardo Guevarra opines:

“Up to this point, the concessionaires have never denied the existence of inequitable provisions in the water concession agreements. In fact, they have expressed their willingness to renegotiate. If this is so, what contracts are supposed to be extended till 2037? The old one expressly repudiated by the government and virtually admitted as flawed by the private concessionaires?”Guevarra said in a statement. (PDI,Dec 219)

More importantly, moving forward, the message it sends to prospective government co tractors and public private partnership (ppp) proponents is this:

You are mere contractors of the state enlisted to provide efficient service to benefit the public.

Accept state ownership and control over utilities and services you want to bid for. Do not play around with contracts to get onerous provisions in and bully us to swallow them.

After all, it is a monopoly business and returns are practically guaranteed. There is no need for greed.