Manila Water to form new unit for overseas projects

Ayala-controlled utility firm Manila Water Co. will form a separate company that will invest in overseas and domestic water supply and sewerage projects that are outside its current business focus.

In a disclosure to the Philippine Stock Exchange, Manila Water said the new corporate vehicle will focus on such projects as water supply and sewerage service projects in key cities in the Philippines, as well as management contracts in India and other Asian countries.

Manila Water said the new company will not handle projects involving the current east zone concession area in Manila, where Manila water services 581,000 households.

At the same time, Manila Water said it approved a plan to secure low-cost environmental loans of up to $2 million. The money will be used to develop a watershed protection for the La Mesa Dam, which supplies water to Manila, and other environmental protection projects.

Manila Water also approved the payment of a cash dividend of seven centavos per share to common stockholders of record as of Sept. 8, payable on Sept. 30.

Manila Water recently prequalified to bid for water supply and sewerage services project in Delhi, India. It teamed up with Larsen and Toubro Ltd., India’s largest engineering and construction firm, and the Mahindra Group, one of India’s leading conglomerates, to bid for the project.

The management contract requires the operator to run the water supply and sewerage systems, including meter reading, billing, collection and consumer relations; provide and put in place operational improvements that would reduce water losses, improve metering, billing and collection and implement energy savings, as well as reliable water supply; and plan and implement a major capital investment program.

Manila Water president Antonino T. Aquino said India’s water sector presents a lot of opportunities because of its huge market potential.

Manila Water already has an ongoing management contract in Tirupur, India with Mahindra and the United Utilities Ltd. Plc of U.K.

The utility firm is into a major network improvement program in the east zone, which includes the development of new water sources and wastewater projects valued at over P20 billion spread over the next five years.

Outside the east zone concession, the company is eyeing the potential development of water projects in other provinces including a bulk water supply project in Cebu.

Manila Water has also joined the consortium evaluating the viability of taking over the rehabilitation of its debt-saddled counterpart in the west zone, the Maynilad Water Services Inc. of the Lopez family. The consortium will evaluate the opportunity on the basis of its investment merits after a stringent due diligence process.

Manila Water supplies drinking water to over five million customers in major business districts in the cities of Makati, Pasig, Taguig, San Juan, Mandaluyong and Quezon City and residential areas in Marikina, Pateros, Cainta, Taytay, Montalban and Antipolo, extending up to the Rizal towns of Angono, Binangonan, Baras and Jala-jala.