Manila Water to invest additional P263 billion

MANILA, Philippines - The Ayala-led Manila Water Co. (MWC) will invest an additional P263 billion with the approval of a 15-year extension of its franchise agreement with the Metropolitan Waterworks and Sewerage System (MWSS).

Sources familiar with the transaction said that industry regulator MWSS has approved the extension of the concession agreement with Manila Water until 2037. The original term was going to end in 2022.

The extension translates to lower rate increases since the investment costs of Manila Water will be spread out over a longer period. To the customers of Manila Water’s east zone franchise area, this means increases in water bills will be tempered.

Under the approved proposal, there will be no rate adjustments for this year. From 2010 to 2012, Manila Water could adjust the rates by only P1 per cubic meter per year. Overall, the new rates are 66 percent lower than the previously approved rate increase of P8.75 from 2009 to 2012.

Despite the lower tariff increases, customers are still expected to enjoy the same level of service it now has as the renewal of the agreement assures the reliability and sustainability of water supply in the years to come. 

The renewal also addresses the government’s mandate the fast track the implementation of wastewater programs to curb the worsening pollution of Metro Manila’s river systems.

Manila Water provides water and wastewater services to the eastern part of MWSS service area including several towns of Rizal Province .

To Manila Water, the new agreement means it has to pour in an additional P263 billion to the venture since its total investments will increase to P450 billion until 2037. In the original agreement, its is going to invest only P187 billion until 2022.

Nonetheless, 2008 was a good year for Manila Water. It booked a record income of P28 billion after breaching the one million mark in terms of number of households serviced. It also completed network efficiency improvements, thus reducing systems losses.

Manila Water services about five million customers in the east zone of Metro Manila, which comprises the cities of Makati, Pasig, Mandaluyong, Marikina, most parts of Quezon City, some parts of Manila, and the municipalities of San Juan, Taguig, and Pateros. It also covers cities and municipalities in the Rizal province.

It also recently bagged a concession contract to upgrade Boracay Island’s water and sewerage system. – Marianne V. Go