Philippines' Duterte orders prosecution of utilities over "onerous" contracts

MANILA, Dec 4 (Reuters) - President Rodrigo Duterte on
Wednesday ordered the filing of criminal charges against the
Philippines' two biggest water utilities and demanded new deals
to replace contracts "onerous and disadvantageous" for
ratepayers, his spokesman said.
The firebrand Philippines leader acted after utility firms
Manila Water Co Inc MWC.PS and Maynilad Water Services Inc
have won arbitration cases in Singapore against the government.
"A review of the agreements with Manila Water and Maynilad
reveals that they are contrary to public policy and public
interest, the same being onerous and disadvantageous to the
people," presidential spokesman Salvador Panelo said.
He said Duterte had ordered the filing of criminal, civil
and administrative charges against everyone involved in the
utility contracts, including the billionaire company owners and
public officials for alleged economic sabotage.
Duterte had tasked agencies to draft new utility contracts
acceptable to the government, he added in a statement.
In April, Duterte ordered a review of all government
contracts with companies and other countries to ensure they were
fair to ordinary Filipinos.
Shares in Manila Water dropped 4.8% on Wednesday while
Maynilad stockholders Metro Pacific Investments Corp MPI.PS
and DMCI Holdings Inc DMC.PS fell 10.7% and 3.9% respectively.
Japan's Marubeni Corp 8002.T owns a minority stake in
Maynilad.
The Permanent Court of Arbitration in Singapore this month
ordered the Philippine government to pay Manila Water 7.4
billion pesos ($145 million) to recoup foregone revenues from
rate increases that were rejected by regulators. Maynilad won a
separate arbitration last year.
The two firms argued that the rate hikes were necessary to
improve utility service coverage and water pressure in homes.
"The arbitration award issued in our favour is for acts in
breach of the procedure committed by officials of the previous
administration, not the Duterte administration," Manila Water
said in a statement, adding that it was willing to cooperate
with Duterte's government. Manila Water serves seven million
customers through a concession valid until 2037.
Maynilad, which caters to 9 million customers, was not
immediately available for comment.
Filipinos are drawn to Duterte's no-nonsense,
man-of-the-people style. But his centrepiece policy - a war on
drugs - has caused international alarm over what U.N. experts
have called a "staggering" number of illegal killings by police,
who say they shot thousands of drug suspects only in
self-defence.