Manila Standard Today, 26 December 2013

By Jennifer Ambanta

 

The Public-Private Partnership Center assured investors the government will honor all contracts with the private sector in the future, despite the controversy surrounding the deal between Metropolitan Waterworks and Sewerage System and its two private concessionaires.

PPP Center executive director Cosette Canilao said the government was taking all the necessary precautions in drafting contracts for programs in the pipeline and those that would be included in the future.

“Investors are now seeing the problem with MWSS. That is why we are so tedious when it comes to drafting contracts. It takes us a while [to] send out our contract.  They give it to us, we give them comments,” Canilao said.

She said the government was taking its time in drafting the contracts to eliminate gray areas where problems might arise in the future.

“We are very tedious because as much as possible, we do not want to have any vagueness in the contract on how to deal with, for example, government actions or regulatory actions,” Canilao said.

“So in our [projects], we have provisions in the contracts, in all our contracts, that deal very clearly on government actions,” she said.

Canilao said in the case of the MWSS, the government still kept its commitment and the contract was still intact.  “We did not alter or change anything from the current MWSS contract. As far as I understand, nothing has changed,” she said.

She said the main issue about the MWSS contract was the rate re-basing every five years.  Canilao said the problem arose from different interpretations of the contract among the parties involved.

“So there is an interpretation from the private sector and the public sector [regulatory office] and we have arbitration process for the MWSS which has already been tested in 2000,” Canilao said.

She said investors welcomed the idea of an arbitration and the clarity of actions in the regulatory process. She cited the Metro Rail Transit Line 3 project as an example of a flawed, yet honored contract.