Ayala unit bids to supply bulk water to Cebu province

MANILA, Philippines -  Ayala-led utility firm Manila Water Co. said yesterday it has submitted an unsolicited proposal for a joint investment with the provincial government of Cebu for the development and delivery of treated bulk water to the province.

Under the proposal, Manila Water will supply 35 million liters per day of potable bulk water sourced from the Luyang River of the municipality of Carmen to meet the growing water supply requirements of several cities and municipalities of Cebu province, namely Danao, Compostela, Liloan, Consolacion, Mandaue, Lapu-Lapu and Cordova.

At present, only 50 percent of these areas are being served.

Manila Water said the Cebu Bulk Water Supply Project (CBWSP) will be implemented under the framework of the joint investment guidelines issued by the provincial sanggunian of Cebu which provides for the guidelines and procedures in entering into a joint investment activity with the province.

Manila Water said the proposal does not include a “take or pay” provision as well as the turnover of all the assets to the province once the initial 25-year cooperation period has lapsed.

“The joint investment proposal with the province of Cebu aims to replicate the improvements that Manila Water made in the (Manila) East Zone as concessionaire of the Metropolitan Waterworks and Sewerage System and help alleviate the critical over-extraction of groundwater in Cebu,” Manila Water said.

Manila Water recently acquired full ownership of AAA Water Corp., which owns 70 percent of a joint venture company that won a 25-year concession to supply water services to Sta. Rosa, Laguna. The joint venture firm, Laguna AAA Water Corp. (LAC), currently serves around 120,000 customers out of around 600,000 population. Total capital expenditures, estimated at P2.5 billion, will be used for the expansion and improvement of water services in the concession area for the next 10 years. 

Manila Water currently has an existing concession in the East Zone of Metro Manila with a customer base of around 5.6 million people.

Since the start of operations in 1997, the company has already increased 24-hour water coverage to 99 percent from 26 percent and reduced water losses from 63 percent to less than 20 percent at present.

From a strategic perspective, the Laguna acquisition along with Manila Water’s takeover of water and wastewater operations in Boracay Island, will further help open up more public-private partnership opportunities in the local water and wastewater sector.