Monitoring MWSS privatization: Water Rates

The management of Manila’s water and sewerage distribution system (MWSS) was privatized in August 1997 in what has largely been touted as a ‘successful’ water privatization, and the largest to date in the Asia-Pacific region.  The International Finance Corporation (IFC), the World Bank’s private sector arm, was adviser to the privatization, which resulted in two 25-year concessions (east and west) competitively bid. Bidding was based on the lowest average tariff to cover operations, investments and profit.  All bids came in below the prevailing tariff of PhP8/78/m3 ($0.00/m3).  The winning bids were Benpres/Suez-Lyonnaise (Maynilad Water Services or MWS) for the west at PhP4.97/m3 ($0.12/m3) and Ayala/Bechtel/Northwest (Manila Water Company or MWC) for the East at PhP2.32/m3 ($0.06/m3).  Under separate concession agreements, Maynilad and MWC have 25 years to rehabilitate and operate the water system, reduce physical losses, check illegal usage and expand service coverage 
Annexed is cosumers' objection to Maynilad and Manila Water's petition for extraordinary price adjustment (EPA) in 1998, the first such complaint filed at the MWSS Regulatiry Office (MWSS-RO).
 

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