Manila Water said it is working on a compromise with the Department of Finance regarding the ₱7.39-billion refund ordered by an international tribunal to cover losses incurred by the utility firm.
A Singapore-based tribunal backed by Permanent Court of Arbitration ruled last week that the Philippine government must pay Manila Water for losses after the regulator refused the proposal to raise water rates from 2013 to 2017.
The Ayala-led firm said that it has been in talks with Finance Secretary Carlos Dominguez III to craft a "mutually acceptable scheme to address the award."
"We informed him that we are willing to come up with a mutually acceptable manner of implementation of the arbitral award considering that this case was filed due to a violation incurred not during this administration," the east zone concessionaire said in a statement. "We wish to reiterate that Manila Water is more than willing and have started to work with the incumbent administration to come up with a workable solution to the arbitration decision."
This came a day after President Rodrigo Duterte dubbed the water supply contracts with Manila Water and Maynilad "onerous," directing Dominguez and Solicitor General Jose Calida to craft new concession agreements with water companies.
Manila Water insisted that it offered the lowest service fees when it secured a supply contract from the Metropolitan Waterworks and Sewerage System (MWSS) in 1997, adding that it was the Ramos administration which solicited bids and determined the terms for the supply deal.
Manila Water brought the government to court and cited its concession agreement which carried a provision that pushes the MWSS to "indemnify" the utility firm against any loss that could result from the regulator's actions. As regulator, the MWSS approves or rejects petitions for water rate adjustments.
"The Republic of the Philippines undertook to respect the procedure, which is under the full control of MWSS from beginning to end. The arbitral award issued in our favor is for acts in breach of the procedure committed by officials of the previous administration, not the Duterte administration," Manila Water added.
Manila Water's contract was supposed to expire in 2022, but has been extended until 2037 by former President Gloria Macapagal-Arroyo. The company said it will need to invest an additional ₱458 billion to comply with additional water supply and wastewater requirements to serve about 7 million customers.
Businessman Manny Pangilinan's Maynilad, to whom the government owes ₱3.4 billion based on an earlier tribunal ruling, previously said that he is willing to drop the case subject to a new agreement on setting tariffs.
MWSS Administrator Emmanuel Salat said authorities are using the existing concession deals which will lapse in 2022 as basis for the fresh negotiations, adding that it's a "matter of consultation" between the government and the concessionaires on how they will go about with changes to the supply agreements.
In a statement sent to reporters, Senator Franklin Drilon denied having a hand in the crafting of the water concession deals after Duterte threatened to sue some senators with economic sabotage, together with the utility firms.
Duterte did not name names, but hinted on Tuesday night that Drilon might have been involved following a reminder from the former Senate President and Justice secretary for the President not to "tinker" with the water contracts.
"I did not in any manner participate in the drafting of the concession agreement," Drilon said.
Separately, Senate President Vicente "Tito" Sotto III said Duterte may be referring to Cabinet members during that time "who became senators later on." Sotto added he is confident that incumbent senators are not involved the water deals in question.
CNN Philippines Correspondents Crissy Dimatulac, Xianne Arcangel, and Joyce Ilas contributed to this report.
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This article first appeared on CNN Philippines.
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