Manila Water Concession
Case Study
PPP Days 2012
Aura V. Abon
Regional and Sustainable Development Department
Asian Development Bank
24 February 2012
Outline of Presentation
• Background
• Legal Framework
• Manila Water Concession
2
Background
•
One of the oldest and the least efficient water systems
among major Asian cities
•
MWSS was heavily indebted, overstaffed and inefficient
•
Three-quarters of the homes in the eastern half of
Manila lacked 24-hour service and only 8% had
sewerage connection
•
Two-thirds of the water produced was being lost to
leaks, poor metering, and illegal connections
3
MWSS vs. Asian utilities
(pre-privatization)
CITY
POPULATION
(millions)
WATER
AVAILABILITY
(hours / day)
WATER
COVERAGE
NON-REVENUE
WATER
(% of population) (% of production)
STAFF / 1000
CONNECTIONS
Manila
10.6
16
58.7
63
9.8
Singapore
3.0
24
100
7
2.0
Hong Kong
76.3
24
100
36
2.8
Seoul
10.6
24
100
35
2.3
Kuala Lumpur
1.4
24
100
36
1.4
Bangkok
7.3
24
82
38
4.6
4
Legal Framework
1990
Build-Operate-Transfer Law enacted
1995
National Water Crisis Law enacted
1996
E.O. 311: MWSS Privatization Framework
1997
Commencement of Concession Period
5
Water Crisis Act
“The government shall address the issues
relevant to the water crisis including, but
not limited to, supply, distribution,
finance, privatization of state-run water
facilities, the protection and conservation
of watersheds and the waste and pilferage
of water, including the serious matter of
graft and corruption in all the water
agencies...”
Executive Order 311
•
MWSS shall enter into agreements that will result in the
involvement or participation of the private sector in any
or all of the segments, operations, and/or facilities of the
MWSS
•
The involvement or participation of the private sector
may include but shall not be limited to: (i) franchising,
concession, management, or other arrangements; (ii)
privatization; or (iii) contracts for projects to be
implemented under BOT and/or related schemes
Private Sector Participation
•
25-year concession
•
Transfer of the overall responsibility for the operations,
maintenance, and investments in the water and
sewerage system to the private sector
•
Service area was divided into the West and East Zones
and the concession was granted to two different private
companies to promote competition
Manila Water Concession
•
East Zone for a 25-year concession
•
Provision of water and sanitation services to
about 7 million
•
CAPEX of more than PhP32 billion since 1997
•
Additional PhP200 billion in CAPEX with the
approval of 15-year extension of the concession
in 2009
Performance Targets
Year
2001
2006
2011
2016
2021
Water Service
87
98
98
98
98
Sanitation
39
40
36
33
29
Sewerage
7
15
26
38
54
2011
1997
26%
99%
24 hours
13-23 hours
0-12 hours
• In 1997, water was available to 3.1 million people or only 26% of
the population in the East Zone
• Today, Manila Water provides water 24/7 to 99% of the population
in its service area, mostly in low income communities
Sanitation and Sewerage
Program
•
36 sewage treatment plants with a combined
capacity of 135 million liters of wastewater per
day
•
2 septage treatment plants with capacity of
1,400 cubic meters of septic tank wastes per day
•
200 kilometers of sewer pipelines have been laid