THE Management Association of the Philippines fully supports the administration’s efforts to better our people’s lives through good governance and delivery of much needed infrastructure, including through the Public-Private Partnership program.
It says that under PPP, investors and financiers are asked to commit huge sums of money on projects with long recovery periods, 20 years or longer, on the promise that government will honor its contract obligations and will do so with consistency and fairness.
Relatedly, it notes that the 16-year-old Philippine Water PPP has contributed much to improve public welfare by having more than doubled the number of customers served, provided a 24-hour water service availability level that meets health standards while addressing the needs of millions in the poor communities.
None of this was available before. The improvements in service delivery came after the two concessionaires poured in a combined P105-billion in investments to expand and upgrade the water and sewage network, achieved without adding to government’s fiscal burden or public debt exposure.
These achievements have won international recognition by IFC/World Bank, International Water Association, the World Economic Forum, and others.
What’s pitiful is that this successful, internationally recognized model PPP has not been replicated outside Metro Manila where the water situation remains at woeful pre-privatization Metropolitan Waterworks and Sewerage System-PPP.
Poor water and sanitation pose significant health risks to millions of people while a well-run utility creates much positive benefit to its customers and to the environment. The gains made under the MWSS-PPP must not be put at risk.
Rather, these gains ought to be imitated elsewhere across the country through similar PPP arrangements so that UN Millennium Development Goal of universal access to potable water can be achieved.
MAP, therefore, views with concern reckless statements, calls for unilateral changes, even abrogation of contracts that have been publicly aired, including by government agents whose responsibility is to deliver on obligations under those contracts.
This has reinforced widely documented observations that there are currently high risks prevailing under the Philippine PPP/investment environment arising from non-delivery by government on contract obligations, coupled with policy inconsistency and regulatory uncertainty.
MAP has cautioned against actions that undermine faith in government’s seriousness of commitment to its own flagship PPP program.
It therefore is urging Philippine authorities to faithfully adhere to the terms of the Concession Agreements including following the provisions on dispute settlement that call for international arbitration in the event of differences.
Demands for tariff adjustments need to be framed strictly within the agreements, and be mindful of the public’s need — not just for reliable clean water, sewage and sanitation services — but for other sorely lacking infras-tructure — mass transport, toll roads, ports, power, and others, which would be affected by any ill-considered decision on this case.
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