SC asked to stop payment of P82B to water firms

By: - Reporter / @TarraINQ
/ 05:26 AM August 12, 2015

Militant lawmakers on Tuesday asked the Supreme Court (SC) to stop the government from paying a total of P82.44 billion in sovereign compensation to water concessionaires Maynilad Water Services Inc. and the Manila Water Company just as parts of Metro Manila experienced water shortages.

In a 60-page petition, Bayan Muna party-list Reps. Neri Colmenares and Carlos Isagani Zarate asked the high court to void the arbitration clause in the concession agreements the government had entered into with Maynilad and Manila Water through regulator Metropolitan Waterworks and Sewerage System (MWSS) for being “illegal and unconstitutional.”


They also asked the high court to nullify the sovereign guarantee accorded the private utility firms for actual and potential losses incurred in utility contracts, saying this violates “the people’s constitutionally assured due process rights and essentially thwarts the powers of the Supreme Court and the MWSS to regulate public utilities.”

Maynilad, which supplies Metro Manila’s West Zone, is demanding P3.44 billion in sovereign compensation from the government for supposed revenue losses it had incurred from Jan. 1, 2013, to Feb. 28, 2015, due to the suspension of the enforcement of rate hikes it had through arbitration proceedings.


Despite its loss in the arbitration proceedings, Manila Water, supplier for the East Zone, is seeking P79 billion in compensation for “potential revenue losses” from this year until the end of its 25-year contract in 2037 “resulting from having to lower water rates following the unfavorable decision from the arbitration panel.”

“This absurd injustice is a direct assault on the people’s constitutional right to due process, because the people who will be burdened by the arbitration panel’s decision are not allowed the opportunity to participate in an arbitration proceedings that has become a private affair between the parties to an agreement,” said the lawmakers.

They asked the high court to strike down the arbitration clause (Article 12) in the concession agreements, saying this in effect encroached upon MWSS’ regulatory powers.

Impleaded in the petition were MWSS, Manila Water, Maynilad, President Aquino and Finance Secretary Cesar Purisima.

The petition aims to stop further water rate hikes and for public funds to be used for sovereign compensation.

The petitioners asked the high court to immediately issue a temporary restraining order or a writ of preliminary injunction to stop “such grave and irreparable illegal impositions.”

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TAGS: Carlos Isagani Zarate, Manila Water, Maynilad, Neri Colmenares, petition, sovereign compensation, supreme court, water concessionaires, water firms
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