By Zinnia B. Dela Peña Updated July 22, 2009 12:00 AM [ [philstar.com ]
MANILA, Philippines - Ayala-owned utility firm Manila Water Co. Inc. has acquired full ownership of AAA Water Corp., which owns 70 percent of a joint venture company that won a 25-year concession to provide water services to industrial towns in Laguna.
In a disclosure to the Philippine Stock Exchange, Manila Water said it acquired 100-percent interest in AAA Water from shareholders Asia Water Corp. (65 percent) and All Asia Development Corp. (35 percent) for an undisclosed price.
The joint venture firm, Laguna AAA Water Corp. (LAC), currently serves around 120,000 customers in its concession area. Total capital expenditures, estimated at P2.5 billion, will be used for the expansion and improvement of water services in the concession area for the next 10 years.
Since the start of the concession in 2007, LAC is responsible for the provision of water services to the city of Sta. Rosa and the municipalities of Biñan and Cabuyao in Laguna province, an industrial zone south of Metro Manila.
Upon satisfaction of several conditions, Manila Water will take over the concession within the year.
While the concession area is home to the operations of several well-known companies, the potential for growth is extremely high as it is currently underserved, Manila Water said.
It noted a growing population and a number of ongoing residential and commercial projects by the country’s biggest real estate firms such as Ayala Land, Eton Properties and Vista Land in the area are expected to boost sales growth over the next several years.
“Projected population growth for the said city and municipalities are placed at an average of at least five percent. Not counting the inflow of new residents to ongoing and proposed residential and commercial developments, the population of the concession is expected to grow to as much as one million people over the next 15 years,” Manila Water said.
With its entry, Manila Water intends to ensure that the increasing demand for 24-hour potable water supply in these communities will be sufficiently addressed. The company believes that it has the necessary manpower, technical and financial resources to make this goal a reality.
Manila Water currently has an existing concession in the East Zone of Metro Manila with a customer base of around 5.6 million people. Since the start of operations in 1997, the company has already increased 24-hour water coverage to 99 percent from 26 percent and reduced water losses from 63 percent to less than 20 percent at present.
From a strategic perspective, the Laguna acquisition along with Manila Water’s takeover of water and wastewater operations in Boracay Island, will further help open up more public-private partnership opportunities in the local water and wastewater sector.
“More specifically, the acquisition of this concession will also help allow the company to look at the possibility of expanding its services to other cities in Laguna, one of the most developed provinces in the country today,” Manila Water said.
___________________________________________________________________________________
