One-third of Maynilad’s losses traced to non-revenue water

An internal study shows that non-revenue water accounts for one third of the losses suffered by the Maynilad Water Services Inc. which is struggling to complete its commitment to rehabilitate and expand the West Zone water and sewerage network.

Based on old records of the Manila Water and Sewerage System (MWSS), there are at least 4,000 kilometers of water pipes laid out all over the West Zone which covers Valenzuela, Navotas, Malabon, Caloocan, parts of Manila and Quezon City, Pasay, Parañaque, Las Piñas, Muntinlupa, Bacoor, Imus, Kawit, Noveleta and other parts of Cavite.

Maynilad said the original estimate indicated only 2,000 kilometers of water pipes, but the records indicated the existence of another 2,000 kilometers that were supposed to have been rolled out throughout the zone.

As it is, Maynilad said the 4,000-kilometer network consists of unsorted and unverified pipes. This means that another inventory is necessary to determine which had actually been laid out and which were only recorded on paper but do not in fact exist.

Being the older of the two major water zone in Luzon, Maynilad's service area is replete with old and possibly no longer serviceable pipes that will have to be replaced altogether. Parts of the network, the company said, were laid out right after World War II and have not been rehabilitated or upgraded since.

As a result, non-revenue water is bigger in the West Zone. Leakage alone accounts for 21 percent of non-revenue water, followed by illegal connections which account for14 percent and unidentified water losses accounting for 14 percent.

Under-registration by small meters accounts for nine percent while under-registration by large meters accounts for four percent. Other commercial losses account for three percent of all non-revenue water.

According to Maynilad, the world standard for non-revenue water is somewhere around 25 percent of all operational losses. The company said one of the objectives of its rehabilitation program is to bring its non-revenue water down to below the 25-percent level by the year 2010.

Maynilad’s West Zone has a potential service population of 7.5 million but at present, it serves only 5.6 million. The expansion of the existing water supply distribution network is designed to supply water to the projected service population and possibly expand beyond 7.5 million.

Maynilad, however, is still waiting for the MWSS to resolve its pending petition for a rate adjustment that will allow the company to recover huge losses that it incurred when the peso plummeted against the dollar last year.

The company had threatened to return its West Zone service concession to the MWSS if the government refuses to renegotiate the concession agreement. The MWSS still has not made a decision on its petition.

Maynilad said it is now facing serious cashflow problems with over P4.8 billion in bridge loans due and demandable this March alone.