NERVE-JARRING and potentially an economic disaster, the water problem in Metro Manila has spilled over to the Philippine Stock Exchange where over $1 billion in shares attributed to the two water concessionaires in the national capital region have gone down the drain.
Though there was a semblance of bourse recovery a few days later, economists fear the bigger impact the issue will create can happen in weeks to come after the banks that extended loans to contractors announced the freezing of money releases.
Curiously, despite these overtures, the Palace and the finance secretary have remained passive to the caveats the experts have raised and are even optimistic the dire prediction will not happen. Worse, the government has shown indifference to the economic tremors that have so far attended the provision in the extension of contracts.
While the justice department has found no extension proviso in the contracts, the urgency to revisit the contracts and address their ‘onerous’ provisions should not be delayed. Issuing acerbic statements only add tension to an already shaky stalemate that raises the fear of consumers that the rift may not be resolved promptly.
Calling concessionaires malicious names, moreover, has added uncertainty to how the contracts will work. Covenants involving the state take effect only after the government has approved them, especially when there is sovereign guarantee involved.
There are also other tricky issues that need to be examined without endangering water distribution in the metropolis. For instance, was the takeover of the concession from Benpres Holdings, the original contractor, done with haste? What issues were taken into consideration that led to the partition of the water concession under two companies?
Contracts with malicious loopholes cleverly embedded in them are arguably complicated documents. They reflect the brilliance of lawyers who prepared them to serve the desire of their investor clients for maximum gains. On the side, the government takes a huge gamble by securing loans of investors mortgaging public welfare.
By invoking the right of government to an advantageous deal in the instant case, the President has taken a radical position that appeals to consumers. The stance, even if deemed doable, is sure to encounter problems along the way. If renegotiated accords can be sealed soon by the parties involved, we hope this will not redound to better water distribution.
We must not wait until the spouts have run dry.
