ADB approves $3.26-M technical aid loan to MWSS

The Asian Development Bank (ADB) approved a $3.26-million technical assistance loan to the Metropolitan Waterworks and Sewerage System (MWSS) to help develop new water sources for Metro Manila’s 10 million residents.

The ADB said the project will involve preparing feasibility studies and providing advice on legal and financial issues for new water source development.

At the same time, training will be conducted to improve the financial management of MWSS and promote better accounting and fiscal control.

The total project cost is $4.97 million, of which MWSS will finance $1.71-million equivalent. The ADB loan will come from its ordinary capital resources, with a 10-year term including a grace period of three years, and an interest rate determined in accordance with ADB’s LIBOR-based lending facility. Completion date of the technical assistance is targeted at end-2006.

The MWSS has already identified three potential watersource projects to be studied under the loan.

The Wawa River Project, which would refurbish a dam and restore the infrastructure to make it a viable resource by removing silt from the reservoir and constructing a new transmission pipeline and water treatment plant.

The Angat Water Utilization and Aqueduct Improvement Project, which will help to improve the main water source for Metro Manila, accounting for 97 percent of the city’s water supply.

One of the aqueducts is leaking, putting half of the capital’s water supply at risk. There is an urgent need to make repairs and construct a new one. The Laiban Dam Project started in 1979 to deliver high quality water to Metro Manila. Since construction was suspended in 1989, about 3,000 families have settled on the dam site.

Reviving the project would cost about $1 billion and would involve relocating the settlers, reviewing the existing design, and preparing environmental impact assessments.

"New water sources will not only ensure improved and sustainable service delivery, but will widen service coverage, especially to the urban poor," says Rudolf Frauendorfer, an ADB Urban Development Specialist.

"Access to clean drinking water is essential for reducing urban poverty and to improve the economic status of the poor, who often have to rely on water supplied by vendors at high cost, or suffer from ill health because they can’t access clean water."

Existing water sources can barely meet demand in Metro Manila, let alone connect additional customers.

Six years after two private concessionaires took over operations from MWSS, water supply continues to be a major concern. The ADB loan will enable MWSS to complete project preparations in time, ensuring appropriate quality and the generation of business opportunities for the private sector in water source development.