Manila Water pursues new investment in Indonesia

MANILA, Philippines - Ayala-owned Manila Water Co. Inc. is once again attempting to establish presence in Indonesia through a demonstration project for non-revenue water reduction that may pave the way for investment in the city of Bandung.

The firm reported to the local bourse yesterday its Singapore unit Manila Water Asia Pacific Pte. Ltd. (MWAP) has signed a memorandum of understanding (MOU) with PDAM Tirtawening Kota Bandung, a water utility company owned and controlled by the regional government of Bandung City in West Java.

Pursuant to the agreement, MWAP would conduct a demonstration project for water loss reduction in Bandung City.

The company said this may pave the way for the implementation of other projects for the development of water services in the city in accordance with Indonesian laws and regulations.

“We are hoping that it will lead to a larger collaboration with PDAM Bandung,” said Manila Water president Gerry Ablaza, Jr.

MWAP would begin the mobilization for the project within three months followed by a physical implementation period of nine to 12 months.

The demonstration project is in line with the company’s strategy to expand its operations outside of the Metro Manila East Zone concession area where it derives most of its income.

Manila Water is determined to lessen its dependence on its main concession area within the next four to five years by maximizing the potential of existing business operations outside of the metro like Clark Water, Laguna Water and Cebu Water. It is also engaging provincial water districts in the optimization of their operations and is creating other sources of revenue like its new bottled water business.

On Wednesday, the company announced the acquisition of a 24.5 percent stake in another Vietnamese water firm Cu Chi Water Sewerage Co. Ltd. for P320 million ($6.87 million) to engage in the management of water distribution in Cu Chi district.

In Vietnam, it already operates Thu Duc Water Holdings Pte. Ltd., and Kenh Dong Water Holdings Pte. Ltd.

It attempted to establish presence in Indonesia in 2013 but failed to acquire half of Indonesia water concessionaire T PAM Lyonnaise Jaya.

The company, however, is confident it would be able to pursue investments in Indonesia through this demonstration project.