Cabinet Secretary Karlo Nograles assured on Friday the amended water contracts would give the government more teeth in regulating the water industry and there will be no provision for an international arbitration court to settle any dispute.

In an interview with reporters in Malacanang, Nograles said the government, through the Metropolitan Waterworks and Sewerage System ( MWSS), could fully perform its function of regulating the water sector under the draft concession agreements.

He said the government's legal team led by the Department of Justice has found numerous onerous provisions, "but three stand out as particularly disadvantageous to the public."

"The government can strengthen its regulation even when it comes to the prices of water," he said when asked of the advantages under the contracts being worked out by the DOJ, Office of the Solicitor General, Office of the Government Corporate Counsel, and the Department of Finance, among others.

Nograles, a former Davao City congressman, said under the new draft, the "unfair" provision passing the concessionaires' business taxes to the consumers would be removed.

He cited that under the current contracts of the Manila Water Company, Inc., and Maynilad Water Services, Inc., consumers, aside from paying their own taxes, also shoulder water concessionaires' taxes.

"So it's unfair," he said.

"Because the (government) could fully regulate, even the quality of service will be regulated. Targets will be set, targets will be imposed," Nograles added.

He said that in terms of the execution of the obligations, there would no longer be a need for an international arbitration court to decide.

"There will be no arbitration court from another country which will decide for us," he said, explaining that if there would be a foreign third party, it could be tantamount to surrendering the Philippine sovereignty.

"That's an insult to our country," he said.

An arbitration court in Singapore earlier ordered the government to pay Maynilad and Manila Water P3.4 billion and P7.4 billion, respectively, as indemnity for breach of contract.

President Rodrigo Duterte has said that the government would not pay the water firms, claiming that their contracts were "void ab initio."

He has ordered the government lawyers to draft new contracts without the "onerous" provisions and show them to the water concessionaires.

DOJ Secretary Menardo Guevarra said the drafting of the contracts could be completed within six months. Celerina Monte/DMS