Duterte can annul contracts with water concessionaires; not to honor arbitral awards - Palace
President Rodrigo Duterte can annul concession agreements with Manila Water Company, Inc. and Maynilad Water Services, Inc. due to "disadvantageous" provisions, Malacanang said on Thursday.
In a radio interview, Presidential Spokesperson Salvador Panelo slammed some provisions in the contracts, such as allowing the government to shoulder the losses and preventing it from intervening in setting the water rates.
He said these were some findings of the Department of Justice, which reviewed the deals.
In separate cases, the Singapore-based Arbitral Tribunal earlier orderedthe government to indemnify Manila Water and Maynilad P7.39 billion and P3.6 billion, respectively, for breach of obligation.
Asked if the concession agreements could be ignored by the Duterte administration, Panelo, who is also the chief presidential legal counsel, said, "Under the Constitution, the main duty of the President is to serve and protect the people. So on the basis of that, the President can do things that can either annul, rescind contracts, which are arranged or agreed against the interest of the people or public policy."
He also said that the government would not indemnify the water concessionaires.
"No, because the contract is onerous, very disadvantageous to the government," the spokesman said.
Manila Water, in an earlier statement, said it was willing to come up with a mutually acceptable manner of implementation of the arbitral award considering that the case was filed due to a violation incurred not during the Duterte administration but during the Aquino government.
Maynilad, for its part, also expressed openness to discuss with the government the concession agreement.
The companies issued the statements after Duterte lashed out at them and their officials and threatened to file economic sabotage against them. Celerina Monte/DMS