Interviewed during the "Impact 2004" talk show of STAR publisher Max V. Soliven which aired live from the Cebu Waterfront Hotel, Mrs. Arroyo sought to dismiss persistent charges by critics and political opponents of an alleged "sweetheart" deal with the Lopezes.
"Sweetheart deal? To begin with, the government is not giving any money to the Lopezes," she said. "It’s a takeover, not a bailout."
Mrs. Arroyo tried to explain in layman’s terms the "very technical" details of the proposed government takeover of Maynilad in which the "quasi-reorganization compromise" of the firm’s P8-billion debt would be restructured, subject to the final approval of the courts and the Securities and Exchange Commission (SEC).
"In fact, Maynilad now will be able to pay the government the concession fees that it could not pay for a long time," she said.
Maynilad is one of the two concessionaires of the Metropolitan Waterworks and Sewerage System (MWSS), the other being the Ayala-owned Manila Water.
The President pointed out that the rehabilitation proposal should be seen as a "gift" by her administration to the people and not as a gift to the Lopezes in return for their political support of her bid for a full six-year term.
Her running mate, Sen. Noli de Castro, is a former broadcaster of the ABS-CBN network, another Lopez-controlled company.
"It’s a gift that I have to give to the Filipino people because of (the need for) the clean water," the President said.
She recalled that a common complaint during her visits to urban poor communities was the lack of clean drinking water.
The President clarified that the financial troubles of Maynilad started even before she took over the government, when the MWSS under the previous administration rejected its petition for a rate increase based on exchange rate adjustments.
Both Maynilad and Manila Water were required to seek MWSS approval for any rate increase.
"So during those times, they (Maynilad) already wanted to pull out (from the MWSS concession contract) and there were calls for the government to take over. But the problem was, where would the government get the money for the take over?" Mrs. Arroyo said.
"They (Maynilad) had , not being allowed to have their automatic adjustment on the dollar changes," she added.
The President said that, with Maynilad being forced "to live within their means," the water services deteriorated in the western zone of Metro Manila that Maynilad serviced.
But opposition candidates from the Alyansa ng Pag-Asa insisted that the government takeover of Maynilad was a "midnight bailout."
Interviewed by reporters during a rally in Quezon City, presidential candidate Raul Roco assailed Mrs. Arroyo’s involvement in the Maynilad takeover as a "conflict of interest on her part."
"The President should only think of the public interest," he said. "The Lopezes are my friends. But in upholding public interest, you cannot be influenced by private interest. You cannot make private interest prevail over public interest."
Alyansa senatorial candidate, Melanio "Batas" Mauricio Jr., has a more interesting suggestion: the use of the state’s police power to take over Maynilad "without paying a single centavo and assuming the debt of the company."
"While this suggestion may be too drastic and radical at the moment, it may be the only way by which the government can assure the people that the takeover of Maynilad is not being done to rescue the Lopez family from financial ruin at the expense of the people," he said.