Investing in water infrastructure is not an easy task. It is an arduous job with social responsibility at the core of the project. Dipping into the water business must navigate the course within an ethical framework. One should bear in mind that unclean water and poor sanitation are a leading cause of child mortality.
The United Nations has recognized the human right to water and sanitation—and made the availability of the commodity as part of the sustainable development goals that every nation must achieve.
The World Health Organization (WHO) in 2019 noted that one in 10 Filipinos do not have access to clean water sources. Just in March this year, the National Water Resources Board (NWRB) confirmed that 11 million Filipino families meet their water needs from “unsafe” sources, including rivers, lakes and even rain water.
Without access to clean water, 53,066 Filipinos died between 2010 and 2019 due to water-borne diseases, data from the Philippine Statistics Authority (PSA) show. The dire statistics underscore the need for sustainable water management.
“Investing in water infrastructure is an arduous job with social responsibility at the core…”
But you need heavy infrastructure investments to achieve water sustainability.
Maynilad Water Services Inc., the concessionaire responsible for providing water services to the western zone of Metro Manila, knows what is at stake and the huge investments required to ensure a more responsible water management regime. It has already spent P210 billion to improve the infrastructure in 15 years since its re-privatization in 2007.
Led by Metro Pacific Investments Corp., DMCI Holdings Inc.,and Marubeni Corp., Maynilad addressed persistent water management problems that had resulted in the recovery of 416 millions of liters per day (MLD) of lost water, the production of 305 MLD in additional supply and an increase in the service coverage in the West Zone to 95 percent from just 78 percent.
The company expanded the 24-hour supply of water to 96 percent of its customers, a dramatic increase from just 32 percent in 2006, improved water pressure delivery to 87 percent from only 45 percent and reduced total non-revenue water (NRW) to 43 percent from a staggering 68 percent.
The effort, though, is not enough—much has to be done to further ensure a sustainable water future. There is no let-up in investments. Maynilad is building four modular treatment plants in Cavite — two in Imus and two in Bacoor. The Imus plants will be operational before the end of 2023, while those in Bacoor are expected to be online by the fourth quarter of 2024. They will generate additional water capacity, ranging from 4 MLD to 18 MLD between now and next year.
In addition, it is building a new water treatment plant in Barangay Poblacion, Muntinlupa. the third facility of Maynilad to tap Laguna Lake as source with a capacity to produce 150 MLD.
Another sustainable supply source that Maynilad has developed to further augment supply from traditional sources is NEW WATER, which is potable water supply sourced from the treated effluent of its sewage treatment plant. Maynilad is working to expand its NEW WATER output by constructing similar facilities in other cities within its concession.
Maynilad is not about hit the breaks. It plans to further expand its coverage and improve its water management systems. With contracts amounting to at least P222 billion, with a disbursement plan of about P163.3 through 2027, the company aims to ensure a better water future for the West Zone.
Maynilad’s investments are part of a long process. It plans to lay down 55 kilometers of new primary water lines and replacing 639 kilometers of aging pipes.
The program includes the replacement of a staggering 538,969 old meters, the purchase of 24 leak detection equipment and the installation of 100 new hydrant meters while replacing 750 existing ones.
The accelerated capital spending, however, hinges on the extension of its revised concession agreement (RCA) with the Metropolitan Waterworks and Sewerage System (MWSS).
Under Republic Act 11600. Maynilad’s franchise is scheduled to last a quarter of a century, or until 2047. Maynilad’s concession agreement with the MWSS, as outlined in the operative RCA, however, is set to run its course and conclude on May 6, 2037, which is approximately a decade prior to the expiration of its franchise.
The extension of the RCA will strengthen Maynilad’s operational and financial capabilities, and enable it to provide consumers with affordable water service without undue uncertainty or delay.
By extending the RCA, Maynilad will have a longer period of cost recovery, resulting in lower tariff increases. Financial simulations show that a one-time equivalent tariff increase can be reduced from 58.56 percent to 35.61 percent with the 10-year extension.
Within the same period, Maynilad intends to embark on a 10-year spending program of about P85 billion to raise the quality of service and broaden its operational scope.
Investing in the future should not be fraught with many uncertainties. Maynilad has that noble mission to provide sufficient water supply, and satisfy basic human needs and the growing demand of the Philippine economy.
E-mail: [email protected] or [email protected]