SolGen to guide DOF’s hand in Maynilad compensation case

MANILA, Philippines–The Department of Finance (DOF) is awaiting the opinion of government lawyers before it acts on the demand of Maynilad Water Services Inc. to be compensated for the losses the utility incurred because of the delay in the grant of a tariff hike.

If the Office of the Solicitor General were to determine that Maynilad should be compensated, the government would not renege on its contract with the water distributor, Finance Secretary Cesar V. Purisima said on Tuesday.

“The important thing is, we’re going to honor whatever the government’s responsibilities are under the performance undertaking,” Purisima told reporters.

The DOF issued the performance undertaking, or the government guarantee, under which state agencies involved in a project will have to fulfill their obligations.

Purisima said the DOF already forwarded Maynilad’s letters, which seek compensation from the government, to the Office of the Solicitor General.

“They [the Office of the Solicitor General] are the government lawyers. They will have to guide us on how to address these legal issues,” the Finance chief said.

Maynilad had served the government, through the DOF, a notice of arbitration and statement of claim. The arbitration proceedings will be conducted in Singapore before a three-man panel.

The water concessionaire serving Metro Manila’s west zone claimed that the delays in the grant of a tariff increase resulted in revenue losses amounting to P3.44 billion for the period Jan. 1, 2013, to February 28 this year. Maynilad also claimed it was incurring revenue losses averaging P208 million for each month of additional delay in 2015.