Onerous, Void P8 –B Manila Water’s Contract

By Mortz C. Ortigoza, MPA

The press conference called recently by Pangasinan Governor Ramon “Monmon” Guico, III thwarted the possible perception of the business communities that the huge local government became the “bad guy” when corporate behemoth’s Manila Water Company, Inc. and its subsidiary’s Manila Water Philippine Ventures Inc. (MWPV) had unilaterally terminated on December 31 its P8 billion contract with the Pangasinan Provincial Government (PPG). The undertaking was supposed to be the 25 years Bulk Water Supply and Purchase Agreement (BWSPA) to the cities of Dagupan, San Carlos and Urdaneta and the towns of Binmaley, Calasiao, Lingayen, Malasiqui, Mangaldan, Mapandan, Manaoag Sta. Barbara, San Fabian, San Jacinto and Villasis.

Manila Water Company, Inc.

Upon listening attentively to the governor and his Legal Chief Atty.  Baby Ruth F. Torre explained the legal sides of the PPG at a presser held at the Urduja Ceremonial Hall, the contract that started to be negotiated in 2016 under the administration of former Governor Amado Espino, III was shrouded with irregularities.

The Governor deplored that the withdrawal of the corporation put into a bad light his administration even most of the agreements ensued during the administration of his predecessor former Governor Amado Espino, III.

“Sumulat sila actually we are set to meet sometimes this January. Bakit parang lumabas sa press na parang nag default ang province. It’s a bad impression to a lot of our friends, business sectors. We’re kasi opening ang province for several investors tapos biglang sasabihin na na terminate”.

TIME LINES

The following are the time lines how the BWSPA was conceptualized and ended on non-conclusion:

September 2016:  The year when Manila Water Co. said efforts to push for the water project began when the consortium submitted an unsolicited proposal to Pangasinan

November 2018: It was followed by the initial evaluation of the Pangasinan Public-Private Partnership Selection Committee (PPP-SC) before the Notice of Acceptance was issued in November 2018.

June 28, 2019: The provincial lawmaking body issued Resolution No. 380-2019 entitled: “Confirming and Approving the Terms and Conditions Embodied in the Certification of Successful Negotiations between the Consortium of Manila Water Philippines Ventures, Inc. and Manila Water Company, Inc. and the Provincial Government of Pangasinan in the implementation of the Pangasinan Bulk Water Supply in the Province, and to Proceed with the Other Processes and Hereby Granting Authority to the Honorable Governor to Sign Pertinent Documents Concerning said Project”.

July 3, 2019:  The Certificate of Successful Negotiation was entered into by the Consortium and the PGP represented by Provincial Administrator Lawyer Nimrod Camba – the Chairman of the PPP – SC.

December 31, 2022: With the active assistance of the Concessionaire, the stipulation was for the PPG to obtain and execute on or before of this date the BWSPA for Phase 1-A in Villasis and Urdaneta as Schedule 6;

January 1, 2023 -  In the event the BWSPA was not secured in Villasis and Urdaneta by December 31, 2022, the Concessionaire shall not be compelled to commence construction by January 1, 2023. That if no new or amended Agreement is executed on or before December 31, 2023 and the parties do not agree to extend the period for renegotiation, this Agreement is deemed terminated pursuant to Section 8.8. 

IRREGULARITIES

Provincial Legal Officer Torres opined the following irregularities on the Agreement:

* The confirmation and approval of the Certificate of Successful Negotiation came before the execution of the said certification;

* Because of the above, Provincial Administrator Camba does not have the authority to represent the Province and to sign the Certificate of Successful Negotiation;

 * Although Camba was the Chairman of the PPP – SC, Section 13 of the PPP Code states that all recommendations of the PPP-SC shall be submitted to the Governor for consideration and approval.

  * No proof of publication of the invitation to Apply for Eligibility and Submission of Comparative Proposals to PPP Provision happened;

 * No payment of Performance Security Bond upon inquiry in the Office of the Provincial Treasurer;

  * The Notice of Award was issued prior to the signing of the PPP Contract (concession agreement). Under the PPP Code, only after the signing of the PPP Contract by the Governor that the PPP-SC shall issue the Notice of Award to the PSP. However, the Notice of Award was issued by the PPP-SC on September 30, 2021 while the Concession was entered on January 14, 2022.

Could not Force LGUs, They have Independent Water Board

Guico found impossible to obligate the nine and five local government units with the BWSPA on or before years 2022 and 2027, respectively.

“Pero medyo mabigat kasi itong condition na ito na kailangan 100% oblige iyong mga water district na kumunek dito. Mahirap iyon na kitaan sila. They have their own board, di ba? They’re autonomous and from the LGU din”.

He added that the local governments could not be forced to enter into a contract just like the corporations.

GUICO STILL WANTS THE PROJECT

The P8 billion project – probably the second biggest PPP in Pangasinan after the P34 billion 43.29 kilometers Joint Venture and Toll Concession Agreements inked by the San Miguel Corporation with the PPG - would create an infrastructure to source water from Agno River using the riverbank filtration technology.

The project was also estimated to deliver a billed volume of 200 million liters per day to 1.4 million  residents  of Pangasinan by the 25th year.

Despite the lopsided agreement entered by the then Espino Administration, Governor Guico still believed on the project of the Consortium.

“We want the project. We believe in the project but umaangal kami dahil sa mga lumalabas na diyaryo we are not pointing at them. Reputable company ito”.

When this writer asked the Governor that after this brouhaha if he was still optimistic that he could still renegotiate the BWSPA with the Enrique Razon leads corporation.

“Sana, it’s really up to them. More of we will be welcoming this kind of investment. Open kami, hindi kami nakikipag-away,” he answered.

LOOK AT OTHER PLAYERS, TOO

“Are there other players on this water concession,” this writer posed.

“Wala pa, wala pa. Sana maraming players so that we can select the best proposals,” the Governor retorted.

My unsolicited advice to the Governor is not only to limit on the renegotiation with the Manila Water Company, Inc. but talks with other big players of the trade like the Metro Pacific Water, Maynilad Water Services, San Miguel Corp – Korean Company K-Water Resources Copt (concessionaire of the Bulacan Water Supply Project) so that he could get the best concession for his constituents.