Ondeo Philippines, the foreign partner of the Lopezes in MWSI, presented a plan to address the problem of non-revenue waters, principally blamed as the cause of the western franchise’s collapse. The eastern half is under Manila Water Co. Inc. (MWCI) of the Ayala Group.
Ondeo’s presentation, however, was not completed during the three-hour closed-door meeting at the MWSS board office in Balara, Quezon City. The presentation will be continued at 5 p.m. today in the same venue.
MWSS ex-officio board chairman and Public Works and Highways Secretary Bayani Fernando, however, refused to discuss the matter when interviewed by The STAR at the Department of Public Works and Highways (DPWH) office in Manila.
"Nothing is final yet. We are still discussing it," said Fernando before hurrying off to another meeting at the DPWH.
Sources said most of the discussion in the board meeting revolved around the western sector’s problem of non-revenue waters. The questions were mostly thrown by Fernando.
Non-revenue water represents possible unrealized profit due to pipe leaks which accounts for some 60 percent the volume of water that MWSI releases lost each day.
"Sec. Fernando asked mainly on how Ondeo plans to solve the non-revenue waters. We are yet to discuss the details of the rest of their business proposal," said a STAR informant.
The board deferred acting or deciding on the proposals until Ondeo has completed its presentation.
The STAR to get MWSI’s side but MWSI corporate communications head Jess Matubis said they could not comment on it.
"That is beyond us. We do not know anything about it. You should ask Benpres," said Matubis. Benpres is the holding company of the Lopezes, which also manages MWSI.
MWSI president Rafael Alunan III was also unavailable as he was reportedly in a meeting at Benpres.
The Lopez-controlled Benpres Holdings Corp. owns 51 percent of Maynilad while the remaining 49 percent is controlled by Ondeo Services Inc. of France (formerly Suez Lyonnaise des Eax).
Industry sources said the 11 percent stake in Maynilad eyed by IFC would come from shares held by Benpres. Unofficial reports indicate that the equity acquisition will come via two routes, debt for equity or through outright acquisition.
The same sources said talks between the IFC, Maynilad, Malacañang and the Metropolitan Waterworks and Sewerage System (MWSS) had been running for more than four weeks now.
The IFC is determined to acquire 11 percent and it is reportedly prepared to expand it further depending on the investment climate. However, the deal remained inconclusive due to difficulties in settling the price of the 11 percent equity stake.
Benpres wants to recoup all their investments made in Maynilad said to have reached over $303 million. In fact, the issue of valuation is part of an arbitration case between the MWSS and Maynilad.
The IFC has an investment portfolio of $175 million in the Philippines, and it is in the market for new investment opportunities this year worth $150 million. In fact, the Philippines is ranked among the 10 largest country exposures of the IFC.
In the past three years, it made invests to 13 business activities.
Among the beneficiaries of IFC’s investment funds in the periods 2000 and 2001 are: Planters Development Bank, a thrift and savings bank focusing on small and medium enterprises; Manila North Tollways Corp., an infrastructure and development firm involved in the expansion of the North Luzon Expressway; APW Trade, a marketing and financial services intermediary for small and medium enterprises; Stradcom Corp., an information technology (IT) company presently modernizing and computerizing the national network of the Land Transportation Office (LTO); and, Asian Hospital, the IFC’s first healthcare project in the Philippines.