Maynilad, Manila Water concession contracts likely extended until 2047

MANILA, Philippines — The water concessionaires for Metro Manila are poised to have their contracts extended until 2047 after securing the board approval of the Metropolitan Waterworks and Sewerage System (MWSS) and endorsement to the Department of Finance (DOF).

In December last year, the MWSS board of trustees (BOT) had approved the extension until 2047 of the revised concession agreements (RCAs) of its concessionaires – Maynilad Water Services Inc. and Manila Water Co. Inc.

The MWSS BOT endorsed and submitted the approved RCAs to the DOF last month, MWSS water and sewerage management department manager Patrick Dizon confirmed to The STAR.

The term extension of the RCAs of the two concessionaires would need the approval of the National Economic and Development Authority - Investment Coordination Committee (NEDA-ICC) as it is covered by the new Public-Private Partnership (PPP) law, Dizon said.

“Hopefully (it would be approved by the NEDA-ICC) within the year since it has meetings every month,” he said.

Maynilad officials also confirmed that their request for the term extension of their RCA with the MWSS has received board approval, noting that it aligns with the expiry of its legislative franchise.

“We will have more confidence now to invest since there is clarity [on the concession agreement]. It gives us a longer runway to recover the investments,” Maynilad president and CEO Ramoncito Fernandez told The STAR.

Fernandez said the additional process of securing the NEDA-ICC approval for the company’s RCA term extension is “nothing to worry about.”

In December 2021, Maynilad, which is the MWSS’ concessionaire for the West Zone of the Greater Metro Manila area, was granted a 25-year legislative franchise until 2047.

Meanwhile, the company’s current RCA with the MWSS is set to end on May 6, 2037, which is 10 years before the expiry of its legislative franchise.

Maynilad applied for the extension of its RCA with the MWSS in the fourth quarter of last year, arguing that a longer contract term could mean savings for its customers because of the prolonged period of recouping its costs and investments.

The water utility firm plans to invest an additional P85 billion over the 10-year extension period that it is seeking.

Likewise, Manila Water applied for a 10-year extension of its RCA until July 31, 2047 to coincide with the expiry of its legislative franchise. The water utility firm targets to invest P1.15 trillion over the extension period to further enhance its services.

In 2022, Congress approved the 25-year extension of the franchise of Manila Water until 2047. Manila Water is the concessionaire of the government in providing water services in the East Zone service of Metro Manila and Rizal province.