DOJ: Water contracts violate existing laws, should be considered void

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The onerous provisions in the 1997 water concession agreements should be considered void for violating existing laws, Department of Justice (DOJ) spokesman and Undersecretary Markk Perete said Tuesday (Dec. 10).

“Fundamental ‘yung principle ng batas natin na if a contractual provision is violative of the law then that is a void provision,” Perete said in a radio interview over DZMM.

Among these burdensome provisions, Perete cited the non-interference clause which states that the government cannot interfere with the decisions of water concessionaires Manila Water Co., Inc. and Maynilad Water Services, Inc. in determining water prices. Under the MWSS law, the spokesman explained the MWSS board of trustees determines the water rates which are either approved or disapproved by the Water Resources Board.

Perete pointed out that while the water concessionaires are being penalized for non-compliance with that provision, the companies can have consumers shoulder the penalties, based on the existing agreements. Perete said the 1997 water concession agreements expire in 2022 and do not have any provisions for extensions.

 

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