Manila Water to manage water systems abroad

Having earned the respect of foreign water experts as an efficient water utility company, Manila Water Co. Inc. (MWCI) is now being tapped to manage foreign water systems abroad like that of India.

"We earn dollars for the country from these water management consultancies. But it does not mean that we have abandoned or reduced our efforts in improving the water systems locally such as expanding in the provincial systems as well," MWCI president Antonino T. Aquino said.

MWCI holds the concession for the east zone of Metro Manila while Lopez-owned Manila Water Services Inc. (MWSI), or Maynilad, operates the west zone. Both companies have been awarded their concessions in 1997 following the liberalization of the water sector.

Manila Water is exploring project opportunities in Asia including the  special project managerial team that operates in the $200 million water and wastewater treatment facility in the province of Tiripur, India.

Its partner in this project is Mahindra Group and MWCI’s British partner in the east zone, UK’s United Utilities Ltd. Plc.

MWCI recently pre-qualified to bid for a $60 million water supply and sewerage services management project in New Delhi, India.

For this, Manila Water tied up with India’s largest engineering and construction firm, Larsen & Toubro Ltd. and the Mahindra Group, one of India’s leading conglomerates.

Aquino said the Delhi Water Supply and Sewerage Project–a six-year management contract for the operation and development of water and sewerage systems for 1.4 million people in India– is part of India’s $100 million loan from the World Bank.

Aquino said his company maintains its commitment to invest more in its concession area and other cities in the country needing its expertise and investments. "I think the Philippines is where those investments should go," Aquino said.

Locally, Manila Water is looking at exciting prospects around Metro Manila but is reviewing such investment prospects in terms of enhancing water revenue and shareholder value.

At the same time, however, Manila Water would like to extend its expertise to other poor countries–similarly plagued by water supply problems–"so that we earn for the country while expanding our markets globally."

Manila Water has submitted its letter of intent (LOI) to take over the west zone held by the Lopez group. But it is still waiting for the terms of reference (TOR) with respect to the sale of MWSS’ majority stake in Maynilad.

Either Manila Water participates as a partner in the new company that will be formed to run Maynilad or as one of bidders for Maynilad’s west zone.

Ayala Corp is the biggest shareholder of MWCI with 30.2 percent followed by UK’s United Utilities with 11.7 percent; IFC with 7.4 percent, Mitsubishi Corp. with 7.9 percent, and BPI Capital with 3.9 percent. Manila Water employees hold six percent, Aquino explained.

Under the concession agreement with MWSS, there is no legal impediment to any one group running the operations of the entire Metro Manila water and wastewater services.

Though Manila Water is poised to lose its income tax holiday early next year, it is looking for additional revenues in "still un-served but high growth" areas within the east zone such as San Mateo, Montalban, Pateros, Taguig and the Rizal towns including Cainta and Antipolo.

Also, because it has improved the east zone’s water availability from 23 percent when it took over in 1997 to 93 percent now, Aquino said "it would be a lot easier to convert non revenue water (NRW) into new connections and improved 24-hour 100 percent water quality service immediately."

In the past, the bulk of NRW came from systems pilferage from low income communities that have not been connected to the main water supply systems. "At Manila Water, we strive everyday to see to it that all within our service area enjoy access to clean, safe water 24 hours a day, rich or poor," Aquino said.

"From our experience, we have found that providing clean, safe water within low income communities is the best way to reduce illegal connections. Combine this with programmed replacement of aging pipes then we drastically reduce systems losses," Aquino explained.

Besides, he said, "our business is more sustainable if we help our low income customers and the institutions that serve them on a daily basis (like hospitals, public markets and public schools) to get access to clean and affordable water supply."

In this connection, Manila Water’s sustainable development programs include Tubig Para Sa Barangay, Lingap Ospital, Lingap Palengke, Lingap Eskwela and Lingap City Jail programs which are "very much integrated into our business operations," Aquino said.

Manila Water is spending P20 billion in the next 10 years to modernize the system to ensure that water reaches the homes of five million Filipinos. This entails major pipe replacements all over the east zone.

To reduce inconveniences for city residents, Manila Water closely monitors its contractors who undertake such pipe replacements. "We have a suki program which strictly selects contractors and monitors their abilities to keep project sites clean, well lighted, equipped with proper safety and project signages, staffed by workers with correct safety gears, including flagmen to direct traffic," Aquino said.

The company penalizes and dismisses the services of contractors who failed to comply with the strict technical and customer service standards of the project development contract, he said. – Rose de la Cruz