For bulk water project in province Manila Water wins bidding

CEBU, Philippines - A Cebu-based water consortium has lost its bid to develop the Carmen Bulk Water Supply Project with the Province of Cebu after its bid was challenged by the original proponent, the Ayala-led Manila Water Consortium.

Cebu Governor Gwendolyn Garcia confirmed the announcement made by Manila Water that the Province of Cebu has awarded the project to them, bringing down the original investment cost from P1.5 billion to P702 million.

“We wish to make official the notice of award that we have issued and the confirmation of the notice of award to and from Manila Water Consortium,” Garcia said in a press conference yesterday.

The landmark water supply project shall supply 35 million liters per day of potable bulk water sourced from the Luyang River of the municipality of Carmen.

The project will partly provide the water demands in the northern and central portions of Cebu province. Currently, less than 50 percent of these areas are being served.

The bulk water supply project is also expected to improve the current groundwater condition in the province which has deteriorated.

Present yesterday were the company’s representatives headed by its corporate communications head, Jeric Sevilla Jr.

As original proponent, Manila Water offered P24.90 per cubic meter of water tariff but during the bidding and Metro-Maynilad Consortium offered P18.71 per cubic meter, making Cebu Bulk Water Resources Inc. (CBWRI) to bid with its lowest water tariff at P13.95 per cubic meter.

Under the Swiss Challenge System, the Manila Water was given 30 days to match the price of CBWRI and they made it, prompting the Provincial Government to issue the notice of award.

“We thank the challenger particularly the Cebu Consortium that put in a water tariff challenged at P13.95 (per cubic meter) and a PIRR (pooled internal rate of return) of P19.26 percent,” Garcia said.

Garcia said the Provincial Government is confident in partnering with Manila Water which has an “unimpeachable track record.”

She added that the winner here in the final analysis is actually the Cebuano public and the Cebu Provincial Government because the consumers will be paying lower water tariff as bulk water is produced at lower cost to be sold to water distributors and local government units.

The Manila Water, in a statement, said they are very happy to have won this bulk water supply bid and congratulated the Provincial Government of Cebu for the “successful conclusion of a competitive and transparent public-private partnership procurement process (5Ps) which sets the tone for similar projects in the future.”

It is the company’s first undertaking with a local government unit in utilizing surface water and environmental management in place.

With the issuance of the award, the Provincial Government of Cebu and the Manila Water consortium will soon execute a joint investment agreement with 49-percent to 51- percent equity participation, respectively. – (FREEMAN)