Managing Negotiations: The Duterte Way (Part 3)

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Palace: Manila Water, Maynilad deals void | Headlines | Daily Tribune
On Water Concessionaires’ Agreement. In the month of December 2019 up to January of this year, rift between the government and the water concessionaires’ have been around hitting the headlines and are getting more controversial as information about erroneous agreement was revealed. Duterte was provoked when he found out these water concessionaires led by Pangilinan and Ayala, filed a lawsuit in Singapore-based arbitration court, and eventually won, ordering the Philippine government to pay 1.8 billion in compensation (Valente, 2020). He accused that these concessionaires are milking the Filipinos since the beginning. “I do not brag. I am not brave. But, son of a bitch, if I get angry with you, I will slap you in Public” Duterte (2020), his strong remark in one of his TV interviews. He assures then, that before he will step down in 2022, the erroneous and onerous contracts signed during the Ramos time further extended during Arroyo’s term, will be corrected. These actions prompted concessionaires executives to initiate a conference with the President, but Duterte seems to snob them. Duterte however is willing to negotiate if Maynilad and Manila Waters (companies of the water concessionaires) will return the money they stole since 1997 water concession agreement and if the latter would accept the the contracts prepared by the government. In the new contract prepared by Department of Justice (DOJ) and Solicitor General and assumed to be available in 3 to 6 months, government can reject water rate increase imposed by the concessionaires, taxes will not be passed on to the consumers and should the concessionaires reject the new contract, the government will take over the water distribution services (Valente, 2020; Blancaflor, 2020).
The government represented by the President seems to have a leverage over the concessionaires as Duterte have well projected his power of influence, hence, there is never a need or favor asked by the government to the concessionaires. Concessionaires now seem to be in the position of negotiators as the revised contract is offered anew which likely to favor the side of the government. Hence, a gameplay must be carefully executed by these concessionaires to come up with the outcomes that will fall within the settlement range. If the concessionaires however find this new negotiation worth entering, they must employ benefit-cost analysis, otherwise, this problem could become a conflict and better option at hand is to withdraw. The government side has the Best Alternative to a Negotiated Agreement (BATNA) readily available (new contract) which appears to be the dilemma of the water concessionaires. Now it’s up to the latter to decide whether to accept or not as they have a scarcity of BATNA that could possibly counter the government’s BATNA at the moment. 

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