The controversy over the alleged onerous terms in the water concession agreements forged by the government with Manila Water Company Inc. and Maynilad Water Services Inc. is expected to die down soon.
The Asian Development Bank is stepping into the picture to help draw up a new concession agreement with Maynilad and Manila Water. The institution’s involvement will clear the air surrounding the water contracts and, perhaps, result in a template for similar privatization deals in the Philippines and Asia.
Growing populations, rapid urbanization, worsening water pollution and competing demands for water have left water resources in many Asian countries in a critical state. Policy makers have noted that the gap between demand and supply is widening, increasing the competition between water users—farmers, energy producers, households and businesses.
Around 70 percent of Asia’s water is used to irrigate crops, but much of it is being tapped inefficiently, while many water-stressed countries lose large volumes of treated water through leakage in urban water supply systems. It’s the inconvenient truth—Asia is running out of water for the future.
ADB’s involvement in the contract is relevant following its vision of “Water for All” for the Asia and Pacific region. The funding agency has been assisting in raising investments for better water services in cities and rural communities and the careful management of water resources.
Justice Secretary Menardo Guevarra announced last week that the ADB would help in crafting a new concession agreement with Maynilad and Manila Water. ADB consultants, he said, would guide the government, including the Department of Finance and the Department of Justice and Metropolitan Waterworks and Sewerage System in revising the deal that allegedly contains alleged “onerous provisions.”
Lawmakers backed the ADB’s involvement in drafting the concession agreements. Deputy Speaker and Surigao del Sur Rep. Johnny Pimentel and Anakalusugan partylist Rep. Mike Defensor joined Albay Rep. Joey Salceda in welcoming the ADB as “a good-faith partner” of the Duterte government, expressing hope that the terms of the new water concession deal would be “equitable and efficient.”
“I think the entry of ADB in the crafting of a new agreement is a welcome development. They are in a better position in giving inputs in the new agreement considering they have access to data of similar concessions in other countries,” Pimented said.
Defensor, chairman of the House Committee on Public Accounts that jointly investigated the 25-year concession deals with House Committee on Good Government, lauded the government’s move to have ADB facilitate the amendments in the concession deals.
“The Executive’s move gives credence to the social, financial and legal considerations given ADB’s experience and credibility. No one can claim that they were bullied in accepting the necessary changes,” he said.
“I am positive that the amendments or changes that President Duterte wants will be accomplished since even during the committee hearings conducted by the House of Representatives, Maynilad and Manila Water were both amenable to amend the provisions such as doing away with charging consumers with corporate income tax, the non-intervention of government among others,” Defensor said.
Salceda, chairman of the House Committee on Ways and Means, said the ADB had always been a government’s “steady supporter of addressing the capital’s water woes.”
“The ADB already supported the NCR (National Capital Region) with value-adding projects like the the Angat Water Supply Optimization Project, the Manila South Water Distribution Project, and the Umiray-Angat Transbasin Project,” he recalls.
“No harm in exploring anything. We just hope the final recommendation will be reflective on the interest of the people – no pass on taxes and increase of tariff to consumers. Any all recommendations are subject to review,” adds Assistant Majority Leader and Quezon City Rep. Precious Hipolito Castelo.
Both Secretary Guevarra and Finance Secretary Carlos Dominguez III are buckling down to work to discuss the role of the ADB in guiding the government to revise the economic and financial terms of the deal.
By all indications, the entry of ADB into the picture ensures any new contract will incorporate President Rodrigo Duterte’s vision that water development policies should promote water as a socially vital economic good that needs careful management to sustain inclusive and equitable economic growth and reduce poverty.
Mr. Duterte’s demand for a more “participatory approach” in meeting the challenges of access to drinking water, sanitation and hygiene will hopefullybe included in the new contract.
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