Manila Water to join bid for government’s majority stake in Maynilad Water

The board of Manila Water Co. Inc. had authorized the company’s bid to acquire the government’s majority stake in debt-strapped Maynilad Water Services Inc.

In a disclosure to the Philippine Stock Exchange, the Ayala-led utility firm said its board "authorized Manila Water to participate, directly, or through a consortium or a special purpose company in the bidding for the assignment of Metropolitan Waterworks and Sewerage System (MWSS) right and obligation to subscribe to equity in Maynilad."

The government took back control of Maynilad last year from Lopez-owned investment holding company Benpres Holdings Inc., which decided to exit the water distribution business after incurring huge losses.

Maynilad’s concession area covers the western half of Metro Manila, while the other half is supplied by Manila Water, a subsidiary of Ayala Corp. Investors have been given until Oct. 24 to submit their bids, with the award expected to be made before December.

Outside the east zone concession, Manila Water is also eyeing the potential development of water projects in other provinces including La Union. It is also exploring opportunities abroad particularly in India, Vietnam and Indonesia where the World Bank is looking to carry out water projects.

For this year, Manila Water has earmarked P4.6 billion for the improvement of its facilities, development of new water sources and its expansion in Taguig and Rizal.

Manila Water had laid down 1,208 kilometers of new pipes over the last eight years, allowing consumption to almost double in is concession area to 859 million liters perday.

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 and Taytay, Montalban and Antipolo in Rizal.

Manila Water posted a net profit of P2.01 billion last year, up 51 percent from P1.33 billion in 2004 on higher revenues and a significant reduction of system losses. Revenues went up 35 percent to P5.68 billion from P4.21 billion as it managed to contain its expenses well within budget levels.