Govt ordered to pay Manila Water P7.39B in claims
Credit to Author: The Manila Times| Date: Fri, 29 Nov 2019 03:05:57 +0000
MANILA Water Co. Inc. scored victory as an international arbitration court ordered the Philippine government to pay the Ayala-led utility P7.39 billion in claims.
The Arbitral Tribunal ruled the government must indemnify Manila Water for losses it incurred from June 1, 2015 to November 22, 2019, 100 percent of the amount paid by the listed firm to the Permanent Court of Arbitration and 85 percent of the company’s other claimed costs.
“The Tribunal ruled that Manila Water has a right to indemnification for actual losses suffered by it on account of the Republic’s breach of its obligation,” Manila Water said in a disclosure on Friday.
Manila Water will coordinate with the concerned government agencies “for an orderly and managed satisfaction of the award.”
On April 23, 2015, Manila Water filed a notice of arbitration before the Permanent Court of Arbitration demanding payment from the government for its losses amounting to P79 billion from 2015 to 2017 due to lower tariffs.
The company submitted its notice of claim to the Department of Finance (DoF) which invoked the letter of undertaking issued by the government on July 31, 1997.
The letter of undertaking was a requirement in the concession agreement of Manila Water with the Metropolitan Waterworks and Sewerage System (MWSS) executed on February 21, 1997.
Through the letter, the government “undertook to indemnify Manila Water, against any loss caused by any action on the part of the Republic and/or the MESS resulting in the reduction of the standard rates ‘below the level that would otherwise be applicable in accordance with the concession agreement.’” JORDEENE B. LAGARE