Philippine regulator repeals utilities’ water contracts after Duterte rebuke

The Philippines’ two largest utilities are servicing a combined 16 million customers, many of whom were affected by the water crisis earlier this year. (AFP)
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Updated 11 December 2019

Philippine regulator repeals utilities’ water contracts after Duterte rebuke

  • Concession agreements with Manila Water Co. Inc. and Maynilad Water Services as ‘onerous and disadvantageous’ to the public
  • Existing concessions will expire on 2022, but were subsequently extended by 15 years

MANILA: The Philippines’ water regulator said on Wednesday it has canceled the 15-year extension of concession deals it signed with the country’s two largest utilities after pressure from President Rodrigo Duterte.
Duterte described the concession agreements with Manila Water Co. Inc. and Maynilad Water Services as “onerous and disadvantageous” to the public, prompting them to be revoked in a move that could turn off investors at a time the government is seeking foreign capital to modernize its infrastructure.
Metropolitan Waterworks and Sewerage System, the country’s regulator, told lawmakers it had revoked last week a decision extending the water concession deals with the two utilities until 2037, sending their shares tumbling more than 13 percent. The existing concessions will expire on 2022.
The firms, which are servicing a combined 16 million customers, secured 25-year concession agreements in 1997, which were extended in 2009 by a further 15 years.
Duterte acted after Manila Water and Maynilad won arbitration cases in Singapore against the government.
The arbitration court in Singapore ordered the Philippines government to pay the utilities a combined 10.8 billion pesos ($212.14 million) in compensation. The companies had said they would forfeit any damage claims to avoid angering the president.
“These companies not only have inefficiently delivered water to the households, but exacted unconscionable amounts from the taxpayers,” Salvador Panelo, Duterte’s spokesman, said in a statement.
The water utilities’ woes display a violation of the sanctity of contracts, Guenter Taus, former president of the European Chamber of Commerce of the Philippines, told Reuters.
“It does not instill investor’s confidence. You can’t just go out and revoke contracts,” Taus said.
The embattled companies’ shares continued their decline on Wednesday, with Manila Water slumping 14 percent.
Maynilad stockholders Metro Pacific Investments Corp. and DMCI Holdings Inc. sank 13 percent and 13.4 percent, respectively.
Manila Water president Jose Rene Almendras told lawmakers the company has yet to study the impact of the regulator’s decision.
“There should be a clean process because we have commitments both in terms of capital expenditures, projects and loans,” Maynilad chief operating officer Randolph Estrellado said.


Duterte to skip Philippine trial of Russia virus vaccine

Updated 13 August 2020

Duterte to skip Philippine trial of Russia virus vaccine

  • Duterte had offered himself up as a guinea pig for the very first jab, expressing “huge trust” in the vaccine
  • The Philippines has logged the highest number of confirmed infections in Southeast Asia

MANILA: The Philippines will begin large-scale human testing of Russia’s coronavirus vaccine in October, but President Rodrigo Duterte will not receive the inoculation until regulators guarantee its safety, his spokesman said Thursday.
Duterte had offered himself up as a guinea pig for the very first jab, expressing “huge trust” in the vaccine, despite growing skepticism about its effectiveness.
But his spokesman Harry Roque said the president was scheduled to receive the vaccine no earlier than May 1 — weeks after the Russian-funded Phase 3 clinical trial in the archipelago is due to end in March.
The country’s Food and Drug Administration is expected to approve the vaccine — developed by the Gamaleya research institute and the Russian defense ministry — in April.
“May 1 is when the PSG (presidential security group) may allow him, once all requisite tests have been finished,” Roque told reporters.
Moscow says it has developed the world’s first vaccine offering “sustainable immunity” against the coronavirus and is in the final stage of tests involving 2,000 people.
Roque said Philippine experts will review next month the results of Russia’s Phase 1 and 2 clinical trials before the Southeast Asian country starts its Phase 3 testing.
“We will do it simultaneously with Russia,” Roque said.
Philippine officials from the science and technology department met with Gamaleya on Wednesday to discuss the protocols for the trial of the vaccine, which is dubbed “Sputnik V” after the pioneering Soviet satellite of the 1950s.
The Philippines, which is struggling to contain the virus, has accepted Russia’s offer to participate in production of the vaccine.
Anna Lisa Ong-Lim, an infectious disease professor at the University of the Philippines College of Medicine, said the government’s timeline to have a vaccine available by May was “very optimistic.”
The country is also set to start on August 17 clinical trials for the Japanese antiviral drug Avigan to treat coronavirus patients.
The Philippines has logged the highest number of confirmed infections in Southeast Asia with more than 147,500 cases and over 2,400 deaths.