Success In A Glass Of Water

The story of Manila Water can be told in many ways, but I particularly like the one in a glass. A water resource governance expert at the Asian Development Bank mentioned in the course of a meeting that Tony Aquino, Manila Water president and chief executive officer, serves guests water straight from the tap. "Try it," she urged.

I emailed Tony and practically invited myself to the Manila Water office in Balara, where all the walls are painted water-blue and, sure enough, I was served a glass of crystal clear water.

"From the tap?" I asked.

"Of course," was the answer. Bottled or "mineral" (as it is commonly called) water is banned from the premises. I took a drink and, to my happy surprise, it tasted just like the water of my childhood many years ago, when boiling our drinking water was merely a precaution, before residential pollution and industrial contamination made clean drinking water a commercial commodity and water filling stations an ubiquitous neighborhood landmark.

Everybody that I related the incdent to expressed total shock that anyone would actually drink tap water in Manila. But, as a visit to the historic Balara Filtration Plant showed, the water from the Angat and La Mesa Dams (it takes four hours for water to travel from one to the other, and another two hours from La Mesa to Balara) is subjected to over six filtration treatments before it is released into the distribution system.

In addition, Manila Water maintains over 600 sampling points throughout its concession area. Water collected from these points are regularly tested by the Metro Manila Drinking Water Quality Committee–composed of the MWSS, Department of Health, Manila Water and Maynilad, and the city health offices of the different LGUs–and since 1998 Manila Water has consistently tested above the acceptable national standard. A caveat though: leaking mains in the system, as well as faulty pipes and storage systems (like cisterns and tanks) within private premises, may result in contamination.

The problem of leaking mains is a major challenge that faced Manila Water when it took over the East Zone concession in 1997. For most of the 1990s, many areas in Metro Manila connected to the MWSS system only had running water a few hours a day, resulting in colorful plastic pails becoming fixtures in all households. A visit to the MWSS in early 1997 to try and work out a better water schedule for our area in San Juan did not get us 24-hour water supply, but we did understand the problem: leaking mains in an antequated pre-war system and illegal connections along the way made it impossible to have water pumped to our area 24/7–losses would simply be unmanagable. Non-revenue water then already reached as high as 63 percent.

Manila Water took the bull by the horns. Intensive capital investment (over P17 billion as of 2005) and aggessive pipe laying and replacement (over 1,200 kilometers as of last year, and still ongoing) have brought systems losses down to 30 percent. From a dismal 26 percent of the population in the concession area having 24-hour water supply in 1997, today more than 95 percent enjoy piped water all day long, with over 930 million liters of water delivered to consumers daily. About 600,000 households are now serviced by Manila Water, a good number of them previously unserved households in low income as well as informal settler communities.

This they have done through a flagship project called Tubig Para sa Barangay that has proven to be both a social as well as commercial success. The project, launched soon after Manila Water took over the concession in 1997, aims to provide piped water to residents of marginalized and informal settler communities who previously had to buy water from street vendors or line up, often late into the night, at a common pump or faucet. Water bought from vendors is hardly clean, and is furthermore quite expensive at P100 per cubic meter, over seven times what Manila Water charges.

The Tubig Para sa Barangay program became the key in raising their standard of living by enabling those in poor communities to have access to safe and reliable water supply. Manila Water has expanded its program to cover institutions like public markets, schools, hospitals, even city jails.

For Manila Water, this has meant increasing their customer base by 141,000 households (equivalent to about 850,000 people), transforming a significant number of previously non-revenue users to legitimate customers. This resulted in gross revenues of P5.76 billion for 2005, 34 percent higher than the year before. With operating costs at manageable levels, net profit of over P2 billion was 51 percent better than 2004, surpassing financial and operational targets. The figures for this year are even rosier, with net income of P1.2 billion on gross revenues of P3.2 billion for the first half of the year.

The company’s sound financial management has in turn enabled it to source additional funding, from local as well as international insitutions, necessary for its continued upgrading and expansion programs. Its much awaited initial public offering (IPO) in March last year registered a record-breaking sales performance in the international market, raising P3.6 billion ($62 million) to fund the company’s business expansion programs.

These include a bid to acquire Maynilad’s West Zone concession, currently undergoing due diligence. It is also further developing its water distribution network in San Mateo and Antipolo (the company’s biggest expansion project), as well as the construction of septage treatment plants in Taguig and San Mateo to address the need for proper sewage management. A state-of-the-art water bridge that will deliver water to the higher areas of San Juan, Mandaluyong and Makati without booster pumps is set for completion this month.

With its successes on several fronts, Manila Water has become a corporate model, and has, not surprisingly, garnered a slew of awards. First there was the Model Company Award from the Department of Trade and Industry, then a string of seven Anvil Awards in the last three years, a special award for the company’s Sustainability Report (first issued in 2004), and the Asia Water Management Excellence Award. Last year it won AsiaMoney’s Best Managed Company Award. Its employees also bagged a record six TOWER (The Outstanding Workers of the Republic) Awards earlier this year.

Last September, it was given the Outstanding Employer of the Year award by the Personnel Management Association of the Philippines for "its significant, purposive and successful transformation of a government-run water distribution utility company into a well-managed, highly profitable and publicly listed enterprise through ‘We Care,’ its people management philosophy that is dynamic, sustainable and responsive to business and employee needs."

Indeed, many thought it to be corporate suicide when Manila Water absorbed the workforce it inherited from MWSS. Instead, the company has cracked the stereotype image of government employees by successfully integrating them into a corporate culture and motivating them to levels of excellence.

Says Aquino: "Manila Water will continue to rely on the same formula which brought about its success over the years: that of merging business strategies with sustainable development intiatives. By simply providing clean, potable water in every community, we helped improve the lives of the people and encouraged more businesses to grow."

It’s not a complicated business formula or some magic secret. By believing in people, caring for the community and the environment, and doing what they are mandated to do, Manila Water has forged a path of success that is as clear and as good as a glass of water.