BSP okays $116.6-million MWSS loan

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has given its final approval on the planned $116.6 million borrowing of state-run Metropolitan Waterworks and Sewerage System (MWSS) from the Export Import Bank of China (China Eximbank) to ensure steady supply of water in Metro Manila.

In an interview with reporters, BSP officer-in-charge Armando Suratos said the central bank’s Monetary Board approved the loan with finality that would be used to finance the second phase of the Angat Water Utilization and Aqueduct Improvement Project being undertaken by MWSS.

Suratos said the loan has a maturity period of 20 years including a grace period of five years and would carry an interest of three percent per year.

He added that the loan also carries a commitment fee of 0.4 percent per annum on the total undisbursed balance of the loan amount.

The project involves the repair the leaks of the existing aqueduct Aqueduct or AQ5 that supplies two billion liters per day of water to Metro Manila. It also involves the construction of a new aqueduct AQ6 to serve as by-pass during the rehabilitation of AQ5 and to accommodate additional supply from Angat and Umiray River Basin.

The three-year project covers the construction of the remaining section of aqueduct AQ6 consisting of 9.9 kilometers including 5.5 kilometers of AQ6 that was constructed on January 2006 under Phase 1.

MWSS would also rehabilitate aqueduct AQ5 and at the same time interconnect AQ1 to AQ4 to AQ5 and AQ6.

About 97 percent of the four billion liters per day supply in Metro Manila is coming from the Umiray, Angat and Ipo Dams. The water flows by gravity through a system of tunnels, basins, aqueducts and eventually channels down to the two treatment plants of La Mesa and Balara.

In January 2002, an inspection of the existing aqueducts revealed that about 13 leakages occur on some segments of the existing Bicti-Novaliches AQ5 that was constructed in 1990.

Three of these leaks were considered major leaks as it losses about 200 million liters per day. The three major leaks were repaired but leaks continue to surface on the other weak points of the existing aqueduct.

The MWSS awarded the second phase of the project to winning bidder China International Water & Electric Co. (CWE) last July 28. The winning bidder edged two other Chinese suppliers.

The Department of Finance (DOF) already successfully negotiated the loan agreement between China Eximbank and MWSS.