President Rodrigo Duterte's administration is preparing new contracts, without "onerous" provisions, for the two huge water concessionaires in the country, Malacanang said on Tuesday.

In a press briefing, Presidential Spokesperson Salvador Panelo said the drafts for the new deals prepared by the Department of Justice and the Office of the Solicitor General were "extensively" discussed during the 45th Cabinet meeting on Monday night at the Palace.

The new contracts, however, did not have any guarantee that those involved in the crafting of the current questionable agreements with the Manila Water Company, Inc. and Maynilad Water Services, Inc. would not be held criminally liable, said Panelo, also the chief presidential legal counsel.

"The Chief Executive is giving the water concessionaires the option of accepting the new contracts minus the onerous provisions without any guarantee of not being criminally prosecuted together with those who conspired to craft the very onerous contracts which are as we have many times said and as the President described it, void ab initio or void from the very beginning for violating the Constitution and the laws of the land," he explained.

Panelo said should Maynilad and Manila Water refuse to accept the new deals, Duterte would order the cancellation of their present water contracts, "order the nationalization of water services in their respective areas of operation and prosecute all those involved directly or indirectly in the arrangement that led to the present suffering of the Filipino people."

"The Filipino people have lost enormously with the unabated collections by these concessionaires despite their dismal performance in supplying and delivering, distributing water," he said.

"And as the President previously uttered in righteous indignation and outrage to them, and I quote him: 'If you will not give justice to the Filipino people, I will get it for them.' There is a time for reckoning and that time has come," Panelo added.

Some of the provisions in the water deals, which the government considers as onerous and disadvantageous include allowing the government to shoulder the water companies' losses and preventing it from intervening in setting the water rates.

In a text message to reporters, Justice Secretary Menardo Guevarra said there was no consolidated draft yet of the contracts.

"The inputs on the financial aspect will have to be discussed further and integrated later," he said.

While there is no specific deadline to complete the draft, he said, "we're giving this matter high priority."

Asked why the Palace was saying that the agreements with the two water companies were void ab initio, Panelo said Manila Water and Maynilad could challenge this before the court.

"They can file a case if they want," he said.

But while the administration considers the contracts null and void, he said consumers should pay the water bills, otherwise, the services would be cut.

He also said that the government is not eyeing a third player in the water services in Metro Manila and nearby provinces, which are being served by Manila Water and Maynilad. Celerina Monte/DMS