Four months after announcing it would not collect the P6.7 billion in compensation from the government as ordered by a Singapore arbitral court, Maynilad Water Corp. is now claiming that it was compelled to make the costly waiver because of a threat from President Rodrigo Duterte.
“Under the pressure and duress of a Congressional Hearing, prior to which Maynilad was threatened with the revocation of its concession, Maynilad made an oral offer to waive its claims against ROP (Republic of Philippines) amounting to P6.7 billion which represents Maynilad’s foregone revenues for the period March 11, 2015 to December 31, 2017,” Maynilad said.
Although it has executed a quit claim on the arbitral award on 2 January 2020, Maynilad stressed: “No recognition of this claim has been made in the consolidated financial statements.” Maynilad appears to be laying the predicate for it to renege on its waiver by claiming that it was done under duress with the public cursing and threats from Duterte. Apparently, it wants to leave the door open to contesting the waiver when the political winds start blowing in its favor.
In DMCI Holdings’ 2019 annual report, the Consunjis did not address directly the compensation awarded to Maynilad for foregone revenues arising from government’s failure to raise water rates. “Maynilad is striving to meet its service obligations but financing these requires resolution of the remaining claim and tax recovery matters,” said DMCI Holdings which owns 27 percent of Maynilad.
Duterte had publicly threatened to revoke the concession agreements of Maynilad and Manila Water Co. and order a military takeover of their facilities if they insisted on collecting on the compensation awarded to them by the Singapore court.
In contrast, Manila Water, which is ran by Ayala Corp., was more straightforward about its decision to waive the P7.39 billion compensation awarded by the same Singapore court against the government.
In Ayala Corp.’s 2019 annual report released recently, Manila Water matter-of- factly stated during the same House hearing attended by Maynilad, that in “deference” to the President’s “pronouncements”, it
would not collect the award from the arbitration proceedings. and that it would defer the implementation of the Approved Rate Adjustment effective January 1, 2020.
Duterte is still reviewing the concession agreements of Maynilad and Manila Water but has apparently softened on his stance on cancelling the 15-year extension of the concessionaires’ contracts.
“Manila Water is committed to perform its obligations under the concession agreement and extension to safeguard its continued right to operate the concession,” said Ayala.