Duterte waiting for Maynilad, Manila Water to sign amended supply contracts

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Metro Manila (CNN Philippines, July 28) – President Rodrigo Duterte shamed the two biggest water supply firms anew during his fifth State of the Nation Address because the two firms still haven't signed new deals with government, his spokesman said Tuesday.

Malacañang spokesman Harry Roque said the President's rants against Maynilad and Manila Water continue despite offering apologies to its owners Manny Pangilinan and the Zobel de Ayala brothers, respectively, back in May.

"Kinakailangan po kasing pumasok sila doon sa amended agreement. Hanggang ngayon po, wala pa 'yang ganyang kontrata," Roque said in a press briefing.

"Ang sabi naman niya pinatawad na niya 'yung mga may-ari niyan. Wala na silang kulong pero kinakailangang magkaroon pa rin ng panibagong kasunduan kung saan bibigyan ng katarungan ang sambayanang Pilipino," he added.

[Translation: They still need to enter into an amended agreement (with government). Until now, there's no such contract. The President said he has forgiven the owners. They will no longer be jailed but they still have to sign a new deal which will give justice to the Filipino people.]

READ: Duterte unlikely to sue water firms after apology to Ayala, Pangilinan business groups – Roque

The two firms supplying water to Metro Manila and nearby provinces have been the subject of Duterte's public rants since late last year after they ran to an international arbiter to demand that government pay ₱10.8 billion to recoup losses from rejected water rate hikes in 2015, during the term of then-President Noynoy Aquino.

The Department of Justice has been told to review the existing deals and craft a new one that no longer allows "onerous" concession agreements, such as requiring government to shoulder a firm's losses.

RELATED: ADB will help in drafting new deal for Maynilad, Manila Water

Negotiations for the new contracts were supposed to last a maximum of six months for eventual signing sometime in June. However, the country had to grapple with the COVID-19 pandemic.

Last year, Duterte ordered the cancellation of contract extensions granted by former Pres. Gloria Macapagal-Arroyo that authorized Manila Water and its counterpart Pangilinan-led Maynilad's supply deals until 2037.

Duterte revived the issue during his penultimate SONA, this time dragging the name of opposition Senator Franklin Drilon.

Drilon, a former private lawyer for ACCRA Law which helped Manila Water draft its supply deal with government back in 1997, on Tuesday denied having anything to do with the contract. He said he had already retired from the firm and was working in Congress at that time.

Manila Water shares dropped by 3.49 percent at Tuesday's trading, shedding a few centavos to ₱12.16 apiece. Meanwhile, the share price for its parent firm Ayala Corporation is up 1.69 percent to ₱722 each.

RELATED: Businessman Enrique Razon buys into embattled Manila Water

Metro Pacific Investments, which runs Maynilad, also saw a 1.32 percent boost in its stock price to ₱3.06 each. Metro Pacific's infrastructure projects were acknowledged by Duterte during his speech.

Duterte also linked the dominance of the two water providers to his crackdown against oligarchs, which he equates to rich families and tycoons "taking control of the water, the electricity and power."

The local utilities sector is dominated by family-owned conglomerates, as these industries require billions of pesos in capital to set up and operate. The Philippine government opted to privatize water and power distribution services decades ago.