Maynilad delivers improved service with more investments

MANILA, Philippines - When you take over a company that used to be highly indebted and the task involves providing quality water service to millions of Filipinos, you would need a lot of patience and hard work.

But Maynilad Water Services Inc. (Maynilad) chief executive officer Victorico Vargas told The Star that since the new owners took over the company, Maynilad has significantly improved service quality in its concession area.

Maynilad provides water and wastewater services to 17 cities and municipalities in the west zone of the greater Metro Manila area. These are in Caloocan, Las Pinas, Malabon, Manila, Muntinlupa, Navotas, Pasay, Parañaque, Valenzuela, parts of Quezon City, parts of Makati, Cavite and the municipalities of Rosario, Imus, Noveleta, Bacoor and Kawit in Cavite.

 In 2007, Maynilad went through a change of ownership when the consortium of DMCI Holdings Inc. (DMCI) and Metro Pacific Investments Corp. won 84 percent of the water company’s shares in a public bidding.

Since then, Vargas said, Maynilad has constantly improved service through different approaches.

These include reducing non-revenue water, tapping new water sources and constructing new water distribution lines through repairs of leaks.

In industry parlance, non-revenue water or NRW is water that has been produced but is lost before it even reaches the customer. Levels of NRW determine the financial viability of water utilities.

Losses come from leaks or losses through theft or metering inaccuracies.

When the new owners took over Maynilad in 2007, the NRW level was 67 percent of the water produced.

Vargas said the goal is to bring this down to 48 percent.

As it is now, Vargas said Maynilad has already brought down its non-revenue water to 50 percent.

To achieve the 48 percent goal, Maynilad is spending over P2.6 billion to reduce NRW in its concession area.

The budget is 53 percent higher over the P1.7 billion earmarked by the company last year to improve its NRW level.

Vargas said investments would be used for network infrastructure as well as for NRW management activities. These measures include providing continuous training of its employees.

Furthermore, Vargas said, Maynilad also acquired a specialized leak detection device for large pipes.

With all these improvements, Maynilad hopes to provide this year 24-hour water supply to 96 percent of the population served in the west zone.

“As of May 21, the level is already at 82 percent,” Vargas said.

Maynilad’s concession area covers a total of 540 square kilometers. Government estimates show that there are 9.5 million people in the west zone.

Overall, the company plans to spend P10.5 billion this year, higher than the previous year’s P8.5 billion.

The increase in the company’s capital expenditures is a testament of Maynilad’s commitment to improve service in its concession area, Vargas said.

Since taking over Maynilad, the new owners have spent P30 billion to enhance water supply service in the west zone concession area and to service loans.

Vargas said that running a water utility company is truly the business of the private sector considering the government’s fragile fiscal position.

“If this were not privately-owned, I don’t think the government would spend,” Vargas said.