Ayala

Manila water - bulk water meters to poor

In some poor neighborhoods, the company offers the option of having bulk meters installed, rather than individual meters . The bulk meters, which are located on the street, can serve up to 20 households each. The customers are then responsible for individual meters and to-house connections, and a community leader takes charge of collecting the water fees from the block. The benefits of this arrangement are for both the company and the customers. Manila Water has an easier administrative task of dealing with a single representative instead of several households, which makes tariff collection easier. The customers share the cost of a group meter amongst all the households, which reduces the costs that individuals have to bear. For poor households, the $120 water meters can be a barrier to being connected to the water system, so the group meter initiative makes connecting to the system more feasible.

Fort Bonifacio Water Corporation (Philippines)

A public-private partnership has been established separately from the MWSS concession agreement in Fort Bonifacio, a new development in the East Zone of the city that has been built on a former military base. The development was started in the late 1990s, during the early stages of Manila Water’s operations. The company had not yet achieved complete financial stability, and was coping with the economic challenges of the Asian financial crisis, and with the management challenges of the transition from a public to privately run water system. The company did not have the capital to invest in extending the water infrastructure to the new subdivisions, and so agreed to a subcontract arrangement. Manila Water signed a contract with the Fort Bonifacio Water Corporation (FBWC), a private consortium of Veolia Water, the Fort Bonifacio Development Corporation, and the Bases Conversion Development Authority. The agreement stipulated that FBWC was required to purchase all its water supply from Manila Water, and in exchange it would have sole jurisdiction over the Global City. The contract was initially a 25-year arrangement, but was subsequently extended for an additional ten years.

Case studies - Manila Water, Maynilad, Tagbilaran, Laoag, Baguio and Ilocos Norte water districts

Urban water management has specific institutional challenges that must be addressed in order to improve freshwater access in developing countries. This paper uses case studies from the Philippines to address the political and regulatory barriers that hinder improvements to water services. The central aim is to move past the typical public versus private debate that has dominated international discussions about investment and management of water utilities over the last two decades.
The paper describes the scope of the water access problems, examines the need to move past ideology in water management decisions, provides case study examples to illustrate relevant issues, suggests context-specific factors that must be considered, and develops suggestions for policy approaches to reform. The main conclusions are that decision makers need to consult with a broader spectrum of stakeholders when undertaking water sector reform, better understand the local context and existing water provision systems before enacting new regulations and structures, draw on theories and experiences of institutional organization to find context-appropriate systems for water resources, and increase transparency, accountability, and flexibility in governance. Case studies from Manila Water, Maynilad, Tagbilaran, Laoag, Baguio and Ilocos Norte water districts.

Manila water expansion projects Philippines & Asia

Manila Water Company Inc (MWC) is the private operator of the east zone concession of the Metropolitan Waterworks and Sewerage System (MWSS) in Manila, Philippines. When MWSS was privatized in 1997, it was touted as the biggest water privatization in the world. MWSS was divided into two zones (east and west) and the management of each zone over 25 years, including financing for capital investments, was bidded out to two private companies. The International Finance Corporation (IFC), World Bank’s private sector arm, advised the privatization; it is now a major shareholder of MWC. Ten years hence, Manila Water has stretched its wings and ventured into ‘markets’ outside its concession, not only in the Philippines but also in the Asian region. International water companies have moved out or slowed down in Asia and the company has aggressive plans to fill in this gap and largely ‘untapped’ market.

Manila Water seeks 15-year extension

MANILA, Philippines — Manila Water Co. Inc., a subsidiary of Ayala Corp., said it would increase by 140 percent its programmed investment in the East Zone if its water concession would be extended by 15 years to 2037. Company president Antonino Aquino told stakeholders who attended a public consultation in Quezon City that the longer recovery period would enable the company to increase its investments in its covered zone to P450 billion until 2037 from the original programmed investment of P187 billion until 2022. At the same time, he said, the contract extension will limit water rate increases to P1 per cubic meter per year between 2010 and 2012. There will be no increase this year. Aquino said this would be much lower than the P2 per cubic meter per year increased contained in the company’s business plan up to 2012. “While we have not yet recovered our investment, we can continue to take loans to meet our investment targets,” Aquino said. “We hope that our proposed extension will be approved by the next quarter so we can proceed with our plans.” Besides allowing lower water rate adjustments while ensuring investment recovery, the extension of Manila Water’s concession to 2037 is also expected to result in more jobs to be created and more income for the government, company business group director Jose Rene Almendras said. Almendras said Manila Water investments had so far helped create 17,000 jobs yearly and this is seen to increase to 21,000 jobs per year because of the larger investments to be made. Government revenue is also estimated to reach P158 billion over an extended period until 2037, compared to only P62 billion in taxes and concession fees to be paid if the company’s concession of up to 2022 is maintained. “The longer recovery period gives us room to accelerate investments in wastewater treatment and sewerage,” Almendras said.
Prodded by the regulator Metropolitan Waterworks and Sewerage System, Manila Water announced that it would increase its 2009 capital expenditure program to P10 billion from P8 billion to fast-track investments in wastewater treatment facilities. The P10-billion allotment will be funded with internal cash and proceeds from a P4-billion bond offer in late 2008. About P5 billion of the P10-billion capital expenditure (capex) allotment will be used for projects in the East Zone of Metro Manila, Aquino said. “Wastewater treatment — that’s where most of it [capex] will go,” Aquino said. “This will fulfill the Supreme Court order for wastewater treatment programs. A major component of this is our partnership with other stakeholders to clean up the Pasig River.”

Tiruppur Water Supply and Sewerage Project

Paper is based on an ongoing MANTHAN study of the Tiruppur Water Supply and Sewerage Project. The paper tries to understand PPPs and draw lessons about the claimed benefits and effectiveness of PPP projects in water sector for providing services to the broad spectrum of users in the society within the context of the Tiruppur Project. The paper looks at the structure that the Tiruppur Project is operating under to study the cost and risk sharing arrangements between private and public sectors in Tiruppur Project. The preliminary conclusions of the study show that the project has not been able to improve the access and affordability of water for the poor, which was claimed as one of the important benefits. The paper also raises questions about the perceived difference between Private Sector Participation (PSP) projects and PPP projects. The paper also draws lessons about the concerns with PPP model at the structural level in water sector in achieving the objectives of supplying water to meet domestic needs of the poor and marginalized sections.

Tiruppur Water Supply Project (India)

Preliminary Note (May 2007 by Manthan Adhyayan Kendra) on Tiruppur Water Supply and Sewerage Project to provide basic on the ground information on India’s largest Public Private Partnership in water supply. This note has been prepared as part of an ongoing study and a short field visit to Tiruppur and Chennai by the Manthan team. This is a preliminary report and a more detailed assessment of the project will be brought out on the completion of the study.

PUP: Haiphong Water/Vietnam – DAWACO/Vietnam twinning

The water utilities of the two big port cities Haiphong and Da Nang, about 900 kilometers away from each other, found that they share the same challenge, i.e., providing quality and reliable drinking water services to their communities in the most economical and efficient way. They also realized that Haiphong Water is performing better than DAWACO (Da Nang Water Supply Company) – Hai Phong has reduced its NRW levels to 21.5% from levels above 60% in the last 10 years. In May 2008, they entered into a twinning program to work on Da Nang’s NRW and management practices. The ‘twins’ see great value in learning from similar utilities because of demonstrative methods that achieve results. [USAID is also facilitating a twinning partnership between DAWACO and Manila Water International Solutions (MWIS), a subsidiary of the private operator Manila Water Company, to support DAWACO’s efforts to provide a safe water supply to its 99,000 customers in Da Nang.]

Philippines: Alternative Approaches to Water Service Delivery in Hard-to-reach Areas

This paper discusses examples of how communities in the Philippines have undertaken the provision of water services
in places deemed unviable by commercially-run utilities (usually rural, including peri-urban areas) and concerns that
they face with regard to ensuring sustainable water services - Binangonan water coops; Community-managed bulk water program in Taguig (concession area of Manila Water Company). Increasing private sector participation in service delivery has also been another key policy of the government. Nevertheless, the perceived risks and low returns regarding commercial investments in this sector (especially for low income rural areas) have served as significant stumbling blocks (see Ferrer 2005). Water service provision in rural areas has proven difficult in other respects. In many instances, both community and LGU providers lack the technical, financial and organizational capacities to manage water systems. Many LGU-run systems are also heavily subsidized as local elected officials prefer to keep water tariffs low rather than risk losing votes. Small water utilities also suffer from a limited revenue base and the attendant difficulty of securing financing. Although water districts are perceived to have better managerial and technical capacities compared to the other service providers, tariffs are generally high and water services to the poor are restricted by rules on financial viability (Robinson 2003).4 In fact, while water districts are supposed to cover the whole municipality or city, in most cases, they Most recent data (2004) from the Philippine Association of Water Districts (PAWD) show that average coverage is only 21% of the water districts’ areas of responsibility, which has been the case since the 1970s (NAPC et al 2006).

Manila Water International Solutions (Philippines) - Danang Water Supply Company (Vietnam)

USAID is facilitating a twinning partnership between the Danang Water Supply Company (DAWACO) and Manila Water International Solutions (MWIS), a subsidiary of the Manila Water Company, to support DAWACO in its efforts to provide a safe water supply to its 99,000 customers in Danang, Vietnam. DAWACO implemented a water safety plan under the WHO framework in 2007 which identified improving water quality management in the water production process and in the water distribution network as priority issues.

Philippine and Vietnamese Utilities Start Twinning Partnership on Safe Water Supply

Manila Water Company Inc. (MWCI) and Danang Water Supply Company (DAWACO) have agreed to work together on improving Danang’s capacity to distribute safe water by addressing chlorination in Danang’s water distribution network. Two senior MWCI staff visited DAWACO and conducted a rapid assessment of its water quality management system, which revealed a lack of adequate procedures, equipment and chemicals. MWCI recommended practical corrective actions that DAWACO could undertake in the near term.

Manila Water assists Danang (Vietnam) utility on Water Quality Management

As part of their twinning partnership with Danang Water Supply Company (DAWACO), on January 19-21, 2009 experts from the Manila Water Company worked with counterparts in Danang to assess the current water quality management practices and draft an action plan to establish a steady chlorine concentration in priority areas. During the visit, Manila Water also trained 18 staff on proper pipe flushing and provided basic guidelines and instructional videos that promote disinfection. DAWACO and Manila Water will be working together for the next several months to address water quality challenges in Danang. USAID supports WaterLinks through its Environmental-Cooperation Asia (ECO-Asia) Program.

MWSS' concession contract a "betrayal of public trust" – FDC

10 February 2009 , MANILA, Philippines—The decision of the Metropolitan Waterworks and Sewerage System allowing its two concessionaires to increase water rates, in defiance of the direct order from Malacañang, proves that its Concession Agreement with Manila Water Company Inc. (MWCI) and Maynilad Water Services Inc (MWSI) is a “betrayal of public trust,” according to an advocacy group.

MWSS privatization & workers woes

In 1997, the privatization of Manila's water utility (MWSS) was the largest of its kind in the world; the World Bank's private sector arm – International Finance Corporation -- was its chief architect. The utility was divided into the west and east zones, managed by Maynilad Water Services (Lopez-Suez/Ondeo) and Manila Water Co (Ayala-Mitsubishi-Bechtel), respectively. The Philippine government took extraordinary measures to ensure that the privatization does not fail, as a showcase of its privatization policy -- e.g., thru approval of 500-700% water rate hikes in 5 years, renegotiation of contract and lowering of performance targets, and other direct/indirect subsidies to the private firms. Privatization failed to deliver the promised benefits of safe, affordable and sustainable water for all. It also left the utility with heavier debt burdens than before. When MWSS was privatized in 1997, nearly half of the 7,400-strong workforce were either coaxed into early retirement, or voluntarily or 'involuntarily' separated.

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