Maynilad projects 10% revenue hike

MANILA, Philippines - Metro Pacific and DMCI-led Maynilad Water Services, Inc. (Maynilad), the private water concessionaire for the West Zone, is projecting a 10 percent increase in its net income this year and a 20 percent increase in revenues even as it has chosen to forego P400 million to P500 million in revenues to the government following a rate discount, according to its president and chief executive officer Ricky P. Vargas.

In an interview, Vargas also disclosed that Maynilad is projecting capital expenditures for the next five years at an average of P10 billion per year.

At the same time, Maynilad chief financial officer Randolph T. Estrellado said that the West Zone water concessionaire may have to raise an additional P2 billion this year to fund new development projects.

Estrellado said that the possible domestic borrowing of P2 billion this year would be on top of the P8.5 billion capital expenditure programmed for this year.

The planned P2 billion domestic borrowing, Estrellado said, would be done towards the end of the year.

Maynilad, Estrellado also revealed, is targeting to further lower its non-revenue water (NRW) this year to an average of 41 percent.

Vargas said that Maynilad is eyeing possible development projects in Cavite, Luzon, Visayas and Mindanao without giving further details.

Estrellado admitted that Maynilad’s expansion plans may be tempered by a study being conducted by the University of the Philippines regarding previous water consumption assumptions.

From an earlier assumption of 1.8 cubic meters per day water consumption, Estrellado said that the UP study now indicates a lower consumption of 1.2 cu m per day.

The lower consumption, likewise, Estrellado said, is affecting Maynilad, Ayala-led Manila Water and the MWSS water source plans.

Vargas had previously announced that Maynilad will spend more than P2.64 billion this year to improve and expand its water services in Parañaque, Muntinlupa, Las Piñas and Cavite.

More than P2 billion has been earmarked to extend the water company’s primary, secondary and tertiary pipelines in Cavite, while P446 million will be spent to reinforce and replace primary lines along Daang Hari Highway from Muntinlupa and Las Piñas.

Over P58 million will be used to fund pipe replacement projects in Parañaque to further improve water supply and pressure for customers in the area who are being supplied by Maynilad’s Villamor Pumping Station.

In all, over 182 kilometers of pipes will be laid in the said municipalities this year. Nearly 47,000 households are expected to benefit from the projects which will also generate some 9,400 jobs.

“We are expediting our service improvement projects in Parañaque, Muntinlupa, Las Piñas, and Cavite because the residents there have waited too long to have access to our services. With the support of the public and their respective local government units, we hope to serve even more households and establishments in the south this year,” Vargas said.

Maynilad’s capex initiatives include the massive rehabilitation and strategic replacement of old pipelines; laying of new pipes to unserved areas, installation of valves and other measuring devices across its water infrastructure network, and construction of new pumping stations, reservoirs and treatment facilities.

Maynilad is the largest private water concessionaire in the Philippines in terms of customer base. It is a concessionaire of the Metropolitan Waterworks and Sewerage System (MWSS) for the West Zone of the Greater Manila Area, which is composed of the cities of Manila (all but portions of San Andres & Sta Ana), Quezon City (west of San Juan River, West Avenue, EDSA, Congressional, Mindanao Avenue, the northern part starting from the Districts of the Holy Spirit & Batasan Hills), Makati (west of South Super Hi-way), Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas and Malabon all in Metro Manila; Cavite City, and the towns of Bacoor, Imus, Kawit, Noveleta and Rosario, all in Cavite Province.