Metropolitan Waterworks and Sewerage System (MWSS) Chairman and Acting Administrator Reynaldo V. Velasco commended the signing of a new concession agreement between the government and the Maynilad Water Services, Inc. “The signing of the new concession agreement is a big step towards water security and it’s a win-win for all stakeholders,” Velasco said. He is optimistic that with the new agreement, various water security projects can now move forward. “Public-private partnership is still the best option for water infrastructure projects at this time,” he added.
Maynilad’s capital expenditure projects will rehabilitate and replace old pipelines, install new pipes in unserved areas, construct new pumping stations, reservoirs and treatment facilities, among others that will result in better service to its customers. The signing came closely after the government signed a renegotiated concession agreement with Manila Water Company, Inc. in the first quarter of the year. Following the template of the new Manila Water concession agreement, the new Maynilad concession agreement eliminated onerous provisions detrimental to the interests of the government and the consumers even as it guarantees the economic viability of the concessionaire’s capital investments. According to Justice Secretary Menardo Guevara, head of the panel that reviewed the concession agreements of Manila Water and Maynilad, onerous provisions such as the non-interference clause and burdening consumers with corporate income tax were removed. He added, “contingent liabilities of the government have been substantially reduced, and a framework for better service to the public has been put in place.”
With the signing of the new agreement, Maynilad will impose a tariff freeze until 31 December 2022. It will also forego collecting the Php3.4 billion compensation from the government. The Permanent Court of Arbitration in Singapore has ordered the Philippine government to pay for the losses incurred by Maynilad because of the prior’s refusal to approve a water rate hike.
The revised CA was the outcome following a thorough review and negotiations were conducted by a government panel led by the Department of Justice based on an order from President Rodrigo Duterte last year.
The 1997 concession agreements with water concessionaires Manila Water Services, Inc. and Maynilad Water Company was signed and took effect during the Ramos administration ushering a private-public partnership for the water sector. The 25-year 1997 CAs supposedly to expire in 2022 were extended for another 15 years pursuant to MWSS Board Resolutions in 2008 and 2009 during the incumbency of President Gloria Macapagal-Arroyo.
Maynilad services the west zone concession area which is composed of the cities of Manila (certain areas), Quezon City (certain areas), Makati (certain areas), Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas and Malabon—all in Metro Manila; the cities of Cavite, Bacoor and Imus, and the towns of Kawit, Noveleta and Rosario—all in Cavite Province. It operates and maintains over 6,800 kilometers of pipelines and delivers over 2,000 million liters of potable water daily to its customers. It has 35 pumping stations, 32 water reservoirs and 28 in-line boosters across its service area. Its reservoirs have a total holding capacity of over 741 million liters of potable water.