By Marianne V. Go Updated March 18, 2009 12:00 AM [ philstar.com ]
MANILA, Philippines - Ayala-led Manila Water Co. plans to invest P450 billion to improve its water concession area in Metro Manila’s East Zone as part of its proposal for a 15- year extension of its contract with the Metropolitan Waterworks and Sewerage System (MWSS).
This was disclosed yesterday by Manila Water officials, led by its president Antonino Aquino and Jose Rene D. Almendras, business group director.
In their presentation during yesterday’s public consultation on the proposed extension of Manila Water’s concession agreement until 2037, it was also revealed that instead of the earlier agreed upon additional tariff rate increase this year of P2.42 per cubic meter, the East Zone concessionaire would not effect an increase this year and maintain its current average tariff rate of around P25 per cubic meter.
Additionally, Manila Water would only increase tariff by an additional P1 per year or a total of P3 over the next three years from 2010 to 2012 and seek a higher rate adjustment only after 2012.
The longer concession period would allow Manila Water more time to recover its investments, thus allowing it to mitigate the earlier approved tariff increase totaling P8.75 from 2008 to 2012.
The adjusted tariff increase of P3 until 2012 translates to a 66 percent reduction from the approved P8.75 increase.
Almendras pointed out that from the original investment of P187 billion for its concession agreement from 1997 to 2022, Manila Water would increase to P450 billion its investment to expand its wastewater service and improve water supply reliability.
The increased investment would dovetail with the Arroyo government’s planned stimulus package as Manila Water would be able to generate up to 30,000 jobs a years through its contractors and suppliers.
The extension of the concession agreement would increase revenues to the government and concession fees to the MWSS from P62 billion to P158 billion over the additional renewal period or P5.3 billion annually, the Manila Water officials pointed out.
Manila Water’s proposal for an extension of its concession agreement was overwhelmingly supported by various sectors during the public sector consultation.
In fact, there were even suggestions for a longer extension of 25 years as the affected consumers attested to the improved and efficient delivery of water service to previously under-provided and even unconnected communities in the past.
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