The government on Wednesday vowed to settle its P3.42-billion payment to West Zone water concessionaire Maynilad Water Services Inc. after a three-man arbitral tribunal unanimously upheld the company’s claim for delayed tariff increases from March 11, 2015 to Aug. 31, 2016.
In a Palace news briefing, Presidential Spokesperson Ernesto Abella said that the Finance department is finding a way on how to “source the payment” after the government failed to approve its supposed rate hike adjustment from 2013 to 2017.
Abella said that the “Office of the Executive Secretary, together with the Office of the Solicitor-General, is reviewing on how best to proceed with the decision” after it received the copy of the decision of the Singapore-based Arbitral Tribunal.
In a disclosure made before the Philippine Stock Exchange on Tuesday, Maynilad said that the tribunal, in a decision dated July 24, upheld the validity of its claim against the undertaking letter issued by the Finance department to compensate the company for the delayed implementation of tariffs for the rebasing period of 2013 to 2017.
The undertaking letter provides that the government will indemnify Maynilad for any losses due to a delay attributable to the state or any government-owned agency in implementing any increase in standard rates, beyond the date of its implementation in accordance with the concession agreement signed on Feb. 21, 1997.
The tribunal ordered the government to reimburse Maynilad the amount of P3,424,690,000, without prejudice to any rights that Maynilad may have to seek recourse against Metropolitan Waterworks and Sewerage System for losses incurred.
Maynilad president and chief executive Ramoncito Fernandez said the amount would not be passed on to the consumers.