THE Metropolitan Waterworks and Sewerage System (MWSS) and its distributors have signed the revised concession agreement (RCA) governing the supply of water in Metro Manila, the companies said on Thursday.
In a separate stock exchange disclosure, Maynilad Water Services, Inc. and Manila Water Co., Inc. confirmed that the amended RCAs were signed on May 10, to retroactively take effect on July 1, 2022.
“We wish to inform the Exchange that a seventh Amendment to the Revised Concession Agreement between the MWSS and Manila Water dated March 31, 2021 was signed by the parties on May 10, 2023 (notarized copy was received by MWC on May 11, 2023),” Manila Water said.
“Along with the Amendments to the RCA, the Republic issued on 10 May 2023 the Undertaking Letter in the form agreed on by the Parties. The Undertaking Letter’s effectivity retroacts to 1 July 2022,” Metro Pacific Investments Corp., which holds a majority stake in Maynilad, said in its regulatory filing.
Maynilad said that the amendments include the deletion of the composition and decisions of the regulatory office from the list of issues not subject to arbitration.
The amendments are intended to align some of the RCA provisions with the revised implementing rules and regulations of the Build-Operate-Transfer Law.
Maynilad, the west zone water concessionaire, said that among the amendments are the adjustments in the consumer price index factor to 3/4 from the 2/3 of the percentage change in the CPI of the Philippines, which it described as consistent with the government’s effort to reinvigorate public-private partnerships.
Maynilad also said that the foreign currency differential adjustment (FCDA) will also be reinstated but only with regard to MWSS loans being serviced by Maynilad and to principal payments on drawn and undrawn amounts of foreign-currency loans as of June 29, 2022.
Maynilad also said that the revised RCA also entails a modified FCDA for loans agreed upon after June 29, 2022, that may only be availed of in the event of “extraordinary inflation” or an “extraordinary deflation” in the value of the peso.
Maynilad also said that the RCA also streamlines the list of events that constitute material adverse government action.
Metro Pacific Investments Corp., which has a majority stake in Maynilad, is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Ashley Erika O. Jose
