Duterte threatens takeover of Manila water firms

Philippine President Rodrigo Duterte has threatened a government takeover of the capital's water services unless its two private utilities accept a new contract, his spokesman said Tuesday, an ultimatum experts warned could spook investors.

Duterte's government will offer a deal to replace the one first crafted in the 1990s when Manila's troubled water system was privatised and which the president calls a "colossal rip-off", his spokesman Salvador Panelo said.

"Should (utilities) Maynilad and Manila Water refuse to accept the new agreements, the president will order the cancellation of their present water contracts and order the nationalisation of water services in their... areas," Panelo said.

No text has been made public and neither firm immediately provided comment on the proposal.

The companies, which serve some 16 million customers, have drawn the president's ire since they won a roughly $145 million arbitration ruling against the government last month over rejected rate increases.

Analyst Calixto Chikiamco warned the offer was "like putting a gun to their (utility operators') head", and risked leaving investors wondering if agreements would be unilaterally changed.

"If the outcome is cancellation and nationalisation, that will have a negative impact across the board for foreign investments," he told local TV.

Duterte has claimed the water firms were committing "economic sabotage" with terms they obtained in their 1997 franchises, including recouping corporate income tax costs from ratepayers.

The companies took over water distribution from the government after a water crisis in the capital, caused in part by the system's heavy debt and a notoriously inefficient pipe network.

Duterte's public comments, repeated several times in speeches since December, helped drive the stock price of Manila Water and Maynilad's listed parent firms down by more than a combined $2 billion.

Related Links
Water News - Science, Technology and Politics

Tweet

Thanks for being there;
We need your help. The SpaceDaily news network continues to grow but revenues have never been harder to maintain.

With the rise of Ad Blockers, and Facebook - our traditional revenue sources via quality network advertising continues to decline. And unlike so many other news sites, we don't have a paywall - with those annoying usernames and passwords.

Our news coverage takes time and effort to publish 365 days a year.

If you find our news sites informative and useful then please consider becoming a regular supporter or for now make a one off contribution.

SpaceDaily Monthly Supporter
$5+ Billed Monthly

paypal only

SpaceDaily Contributor
$5 Billed Once

credit card or paypal

A close look at thin ice
Philadelphia PA (SPX) Jan 07, 2020
On frigid days, water vapor in the air can transform directly into solid ice, depositing a thin layer on surfaces such as a windowpane or car windshield. Though commonplace, this process is one that has kept physicists and chemists busy figuring out the details for decades. In a new Nature paper, an international team of scientists describe the first-ever visualization of the atomic structure of two-dimensional ice as it formed. Insights from the findings, which were driven by computer simulations ... read more