WORLD BODY ORDERS MAYNILAD TO POST $150-M BONDManila, May 6, 2003 -- The financial woes of the Lopez-owned companies do not seem to stop.
A week after the Supreme Court ruled with finality its order requiring the Manila Electric Company to reimburse its customers P28 billion in overcharges it made since 1994, an arbitration body has ordered another Lopez consortium, the Maynilad Water Services, Inc. (Maynilad), to post a $150 million performance bond to answer for its obligations to the Manila Waterworks and Sewerage System.
Justice Undersecretary Manuel Teehankee, who is also the Government Corporate Counsel, said the International Arbitration Commission has required Maynilad to post the bond on or before June 15 to serve as a security for its obligations to the government because of the water concession agreement.
Maynilad and the MWSS is currently into an arbitration process after the former, citing violations of its contract, decided to terminate its water concession agreement way before the expiration of its 25-year agreement with the government.
Maynilad had entered into a water concession agreement with MWSS to service the water requirement of the western portion of Metro Manila.
The pretermination move by Maynilad was opposed by MWSS as it cited violations by the water concessionaire of its own contract.
MWSS said Maynilad is liable for its failure to reconstruct and rehabiliate the Balara-Novaliches aqueduct, among other violations.
Teehankee said Maynilad needs to renew the $120 million performance bond it has executed by June 15 because it is set to expire in July. Aside from this, the arbitration body required an additional $30 million bond due to the escalating obligations of Maynilad to MWSS.
Teehankee said Maynilad's obligations to MWSS at present stand at $90 million.
Failure to renew and pay the additional bond, according to Teehankee, will lead to the enforcement of the monetary obligations of Maynilad to the bond which will make it liable for immediate payment. (Cheloy Garafil, Malaya)
Reported by: Sol Jose Vanzi
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