Ex-MWSS chief on water deals: 'I was thinking of the Filipino people'

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Dr. Angel Lazaro III, former head of the Metropolitan Waterworks and Sewerage System

Metro Manila (CNN Philippines, December 11) — The former head of the Metropolitan Waterworks and Sewerage System (MWSS) defended the crafting of water concession deals with Maynilad and Manila Water, which has been branded as "disadvantageous" to the state due to guarantees granted to private firms.

Engineer Angel Lazaro III, the MWSS administrator from 1995 to 1997, told senators on Wednesday that the supply deals awarded to the two businesses have been crafted with the help of consultants tapped by the regulator in its first attempt to privatize the utility, as they hope to improve water services.

Lazaro said that at that time, only 63 percent of homes were covered by state-run services and that water flow was steady for just 16 hours on average before the private players came in. The National Water Crisis Act passed by Congress in 1995 triggered the privatization of water services, he added, as MWSS was struggling to handle its ballooning debt.

"Ganoon ho ang sitwasyon noon kaya siguro naman [That was the situation then]... and I am at peace, I would like to think that I was thinking of the Filipino people at that time," Lazaro added. "'Yung tingin hong onerous ngayon...Noong 1997 iba ho kasi e, ang sama-sama ho ng sitwasyon eh."

[Translation: What you think are onerous now was different back in 1997, when the situation was so dire.]

Senators Aquilino "Koko" Pimentel III and Christopher "Bong" Go pressed Lazaro where the supposed irregularities in the water deals came from. The former MWSS chief said the supply contracts were finalized by the consultants with the government, clarifying that private bidders were asked for inputs but did not get to see the draft deals.

"Hindi naman po kami nahihiya na aminin na hindi po kami marunong dahil sa wala pa namang privatization ng water dito sa Pilipinas, kaya ho kami kumuha ng consultant," Lazaro told members of the Senate Committee on Public Services.

[Translation: We're not ashamed to admit that we didn't know how to do it since water has not been privatized in the Philippines before, that's why we hired consultants.]

Among the consultants which the MWSS tapped for the process were the World Bank, Gottlieb Law, ACCRALAW, and accounting firm Punongbayan & Araullo, to name a few. He clarified that these entities were already hired when he was appointed to the MWSS.

Lazaro added that then-President Fidel Ramos created a group consisting of the Executive Secretary, Malacañang's legal counsel, the Office of the Government Corporate Counsel, and the Department of Justice to review the terms of the concession deal during the bidding process.

READ: MWSS revokes contract extension of Maynilad, Manila Water

Duterte has grown furious at the two private firms after Manila Water secured a win at a Singapore-based tribunal in its demand for a ₱7.39-billion refund from the Philippine government to cover losses incurred due to the denial of higher water rates from 2013 to 2017. The Pangilinan-led firm cited a provision in its concession deal which pushes the state to "indemnify" the utility firm against any losses that could result from regulatory actions.

Water contracts are currently with the Department of Justice for review, which said that the deals carried "onerous" provisions which were disadvantageous to the government. Presidential Chief Legal Counsel Salvador Panelo has named several one-sided provisions in the signed deals, such as stopping state intervention in setting utility rates.

READ: Duterte unwilling to compromise over "onerous" water deals

Duterte has threatened to sue for economic plunder the water concessionaires and former MWSS officials over this. On Tuesday, he asked lawyers who crafted the 1997 deals to go to him, otherwise threatening them with warantless arrests.