Guevarra: Govt takeover of water distribution a ‘last resort’

Justice Secretary Menardo Guevarra on Monday bared that the government is ready to take over water distribution in Metro Manila but only as a last resort.

Guevarra cited as the government’s legal basis the 1987 Constitution should it finally decides to step in.

“The gvernment takeover or nationalization of water distribution, as authorized under Sections 17 and 18, Article XII of the Philippine Constitution, is the government’s last option,” he said.

Recently, President Duterte was quoted to have said that should water concessionaires Maynilad and Manila Water refuse to accept a new water agreement, the government will cancel their concessions and nationalize the water service.

“The government may temporarily take over any private business imbued with public interest in case of national emergency and when public interest requires it.”

“The government may also take ownership of public utilities operated by private entities upon payment of just compensation, in the interest of national defense or public welfare,” Guevarra said.

Earlier, Guevarra disclosed that the draft new contract with water concessionaires Manila Water Co. and Maynilad Water Services Inc. may be available in six months.

Guevarra disclosed that the Justice Department, Office of the Solicitor General, and Office of the Government Corporate Counsel review team would still be needing inputs from the Department of Finance over the economic and financial provisions of the draft contract.

“We are really leaving it to the Department of Finance to fill in certain inputs pertaining to financial matters and economic issues pertaining to the reformation or adjustment of this new water concession agreement,” Guevarra said.

But Guevarra assured the concessionaires that they will be given ample opportunity by the government to scrutinize and renegotiate the new agreement.

“There will be a process of discussion and renegotiation. It’s not a 100-percent take it or leave it thing. We are reasonable in so far as this matter is concerned,” Guevarra .

Last year, Guevarra said the government could lose billions of pesos to Maynilad and Manila Water because of two disadvantageous provisions in its 22-year-old agreements with the said water concessionaires.

Guevarra issued the statement as a Singapore-based arbitration panel ordered the government to pay Manila Water P7.39 billion in years’ worth of losses due to the Metropolitan Waterworks and Sewerage System’s reduction of water rates instead of an approval of their proposed rate hikes, while Maynilad was awarded a P3.424-billion reimbursement in 2017.

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