MANILA, Philippines – The Manila Water-led consortium said it expects its P1.55-billion Carmen bulk water supply project to come on stream by the third quarter of 2013.
In a disclosure to the Philippine Stock Exchange yesterday, Manila Water said it signed a joint investment agreement with the provincial government of Cebu to develop and operate the project for a period of 30 years, renewable for another 25 years.
The Cebu government and the Manila Water-led consortium – which also comprises Vicsal Development Corp. and Stateland – shall form a joint venture company to be 51 percent owned by the group. The Cebu government will hold the remaining 49 percent stake.
The project shall supply 35 million liters per day of potable bulk water sourced from the Luyang River in Carmen. Expected to benefit are residents in the towns of Carmen, Compostela, Liloan and Consolacion, and the cities of Danao, Mandaue and Lapu-Lapu.
Currently, Metropolitan Cebu has a water demand of some 340,000 cubic meters of water per day but only half of this is reportedly being serviced.
Through this partnership, the parties seek to leverage on each other’s key strengths and core competencies in the provisions of world-class services to its customers and enhance sustainable development for the province.
“We are very privileged to be a partner with a world-class consortium with an excellent track record of providing competitively-priced and high quality water service,” said Cebu Gov. Gwendolyn F. Garcia.
For his part, Manila Water chairman Fernando Zobel de Ayala said the group is “extremely proud of this historic landmark agreement with the government of Cebu and to be a committed partner in Cebu’s pivotal role in both regional and national development.”
Manila Water said the project does not account for more than 10 percent of its total assets.
Cebu successfully negotiated the unsolicited offer with the consortium subject to competitive challenge in accordance with the joint investment ordinance of the province approved in 2009.
Under a Swiss challenge system observed in the bidding process, the original proponent, the Manila Water consortium, is allowed to match the best offer made by third-party bidders.
A Cebu-based water consortium offered the lowest water tariff at P13.95 per cubic meter.
Manila Water currently serves the water and wastewater needs of the eastern part of Quezon City, Mandaluyong, San Juan, Marikina, Pasig, Pateros, parts of Manila and Makati in the National Capital Region, and Rizal province.