The government panel held the consultation to allay suspicions that the build-operate-transfer contract between the government and Maynilad was a "sweetheart deal" with the debt-saddled water concessionaire.
Justice Undersecretary and MWSS legal adviser Manuel Teehankee presided over the briefing on the joint MWSS-Maynilad reorganization plan and earnestly answered queries from non-government organizations (NGOs) — including Bantay Tubig, the Freedom from Debt Coalition, and the Foundation for Economic Freedom — as well as consumers from Metro Manila’s west zone.
Teehankee said, "the government is not waiving options for the early termination of Maynilad’s concession contract," but he added that the proposed reorganization of the water company is still the best alternative for achieving a "win-win situation."
From a purely financial point of view, Teehankee said, the termination of the concession "is eminently better, because we will start with a clean balance sheet."
However, he added that there are "other important factors to consider."
"The early termination (of the concession contract with Maynilad) has always been an option of the government ... (but) the arbitral panel is having difficulty finding fault (since) the privatization (policy) does not have no-fault divorce provision," he said. The arbitration panel "instead (ordered) the continued concession of Maynilad and encouraged an extrajudicial solution," he said.
Teehankee also belied reports that the deal had been agreed upon with undue haste, since the scheme was "consensual, rather than a disputed and protracted solution among MWSS, Maynilad’s sponsors and existing creditors ... (and it was best) keeping in mind larger concerns."
He presented slides to highlight the features of the three rehabilitation plans that were raised. The first rehabilitation plan, filed by Maynilad in 2003, was subsequently replaced for being "grossly disadvantageous to government." The next option was laid out by the MWSS, which proposed a full draw of a stand-by letter of credit (SBLC) worth $120 million and termination. The third option involves the quasi-reorganization alternative now filed before the Quezon City Regional Trial Court Branch 90 under Judge Reynaldo Daway.
According to Teehankee, the third option takes into consideration the continued supply of water to the west zone, the interests of Maynilad employees, the country’s credibility standing with foreign investors and leaders, the impact on the MWSS and the finances of the national government, as well the reorganization’s impact on local banks and the Philippine financial system.