Philippines’ collaborative efforts to bolster its water infrastructure-
Over the years, the water market in the Philippines, particularly in the Metro Manila area, has become both significantly larger and more attractive. Not only is the government paying greater attention to improving water supply services, it is also inviting private sector participation (PSP) to strengthen competitiveness and upgrade the currently inadequate infrastructure.
The Philippines government has made different arrangements for the provision of water to different parts of the country. Water districts headed by autonomous boards have been formed in most cities and municipalities outside the Metro Manila area. In the Metro Manila area, the government has partnered with big private corporations to operate the water supply and wastewater management system. In addition, local government units, along with community-based and non-governmental organisations, have been engaged in the supply of water to small towns and rural areas.
In the past year or so, these water supply agencies/private entities have implemented a number of programmes/projects to increase access to water supply and sanitation services. The primary focus has been on improving water supply infrastructure facilities in the country. At present, water supply projects worth over PhP 45 billion are at different stages of development. Projects amounting to another PhP 75 billion are being planned; they are expected to be approved in the next one–two years. The sector is likely to receive financial assistance of over PhP 12 billion from multilateral agencies to improve infrastructure facilities.
Southeast Asia Infrastructure provides a snapshot of the key projects currently under implementation and being planned for the near future…
Metro Manila area: Private water operators spearhead infrastructure improvement projects
A number of expansion projects have been planned for different parts of the country. These involve the laying of new pipelines; the extension and repair of old and faulty pipes; the construction of new water treatment plants and water storage facilities; the installation of meters; and the expansion of sewerage networks.
The Metro Manila area has been the most attractive destination for investments in water supply and sanitation. The two private water companies, Manila Water Company (MWC) and Maynilad Water Services, Inc., have formulated several infrastructure development plans to improve water supply services in their concession areas. These companies are also executing projects and providing technical assistance to local governments and water utilities in other areas of the Philippines.
Maynilad, the private operator in the West Zone of the Metro Manila area, has announced plans to spend PhP 18 billion over the next year to fund its water supply and wastewater infrastructure improvement projects. About PhP 2.7 billion of the total amount will be spent on Maynilad’s service expansion programme that includes the laying of primary pipelines in parts of Cavite, Las Pinas, Muntinlupa, Paranaque, and Quezon City. To ensure sufficient water supply and pressure in the West Zone, a sum of PhP 2.3 billion has been earmarked for constructing, rehabilitating, and upgrading boosters, pumping stations, and reservoirs. Further, the company has allocated a sum of PhP 2.2 billion to lower the amount of non-revenue water. The programme includes reducing leakages in pipelines, illegal connections, and inaccurate water metering. Pipeline replacement projects in selected parts of Manila, Caloocan, Malabon, Valenzuela, Paranaque, Las Pinas, and Cavite cities will entail a cost of PhP 1.4 billion. Meanwhile, about PhP 665 million will be expended on water meter management projects, including the establishment of district metered areas, leakage repairs, and diagnostic activities. Finally, a small part of the budget will be used for procuring leak detection and other technical equipment.
Another area of focus is the improvement of wastewater management, which will be accompanied by the expansion of the treatment capacity and conveyance network. About PhP 7.2 billion will be spent over the next year to improve and expand wastewater management services in Paranaque, Muntinlupa, Las Pinas, and parts of Cavite province. About PhP 4.7 billion of this amount will be used to build a sewage treatment plant (STP) in Muntinlupa and lay more than 50 km of sewer lines in Paranaque and Muntinlupa. Another PhP 1.9 billion will be used to extend Maynilad’s primary lines at Bacoor and Imus (Cavite), Las Pinas, Muntinlupa, and Pasay. In addition, PhP 450 million will be spent on the construction of additional boosters and reservoirs, while about PhP 84 million has been set aside to rehabilitate Maynilad’s network facilities.
Maynilad has also announced that it will spend about PhP 500 million over the next year to connect an additional 50,000 water accounts in Bacoor, Imus, Kawit, Noveleta, and Rosario in the province of Cavite. About 70 km of primary pipes and more than 80 km of secondary pipes will be laid to expand the distribution network.
The East Zone concessionaire, MWC, has also formulated plans to strengthen infrastructure facilities and improve service delivery. In 2013, the company announced that it would spend PhP 1.9 billion over the next three years (2014–16) to construct a 12 km sewer network in Taguig, Makati, and other areas. Once completed, the project is expected to treat up to 75 million litres per day (mld) of wastewater, thus meeting the needs of about 1 million residents in the cities of Taguig, Makati, and nearby areas. Moreover, the company will construct a 3.2 km sewer network in San Mateo, Marikina, and other nearby cities as part of a project worth PhP 346 million. The network, to be constructed using the trenchless methodology, is scheduled to be completed by 2014. It will carry sewage to an STP that the company is building in Marikina City.
A large-scale water pipeline rehabilitation and replacement project is also being implemented by the company in Quezon City to replace the ageing pipeline network. The company has earmarked a sum of PhP 48.6 million for the project. A total of 3.38 km of new lines will be laid to improve the efficiency and reliability of the water network so as to meet the increasing water requirements in the area.
Outside Metro Manila area: Collaboration between public and private entities
Outside the Metro Manila area, local governments and water utilities are playing an active role in improving water supply and wastewater infrastructure facilities. These agencies have collaborated with big private companies to implement water supply projects in areas under their jurisdiction. For instance, the Cebu provincial government has collaborated with MWC to implement the PhP 1.1 billion Cebu Bulk Water Supply Project. The project is aimed at augmenting the water supply to northern and central Cebu by about 35 mld. It is expected to be completed by mid-2014.
The Metropolitan Waterworks and Sewerage System (MWSS), in conjunction with the Public Private Partnership Center of the Philippines, plans to implement the Bulacan Bulk Water Supply Project. The PhP 24 billion project is aimed at providing treated bulk water to the province’s 21 municipalities and three cities. It will be implemented under a 30-year concession agreement between MWSS and a private company. In February 2014, the Regional Development Council accorded administrative approval for the project. The Metropolitan Cebu Water District, being the water distributor in the central and northern parts of Cebu, will be its biggest beneficiary.
A bulk water supply project is also on the cards for Davao City. In mid-2013, a joint venture of Aboitiz Equity Ventures and J.V. Angeles Construction Corporation submitted a proposal to the Davao City Water District (DCWD) to supply 300 mld of potable bulk water to the city. The project includes the construction of a hydroelectric-powered bulk water treatment facility and the conveyance system needed to deliver treated water to DCWD’s delivery points.
Assistance of multilateral agencies
Multilateral agencies such as the Asian Development Bank (ADB), the Japan International Cooperation Agency (JICA), and the World Bank have also approved financial assistance to improve water supply and sanitation services in the Philippines. ADB has offered a loan of $180 loan to finance four water supply and sanitation projects. The $51 million Angat Water Transmission Improvement Project will enhance water supply services to the MWSS service area through the rehabilitation of the Angat transmission line. ADB has also approved a loan worth $60 million under the Water District Development Sector Project to strengthen the water supply and sanitation infrastructure outside the Metro Manila area. It is also likely to provide a loan worth $70 million for the Urban Water Supply and Sanitation Project that aims to improve water supply and sanitation services in Metro Cebu and Davao City.
Meanwhile, JICA has extended an initial $16.3 million loan to the Development Bank of the Philippines to leverage on private sector funding for water supply projects. In January 2014, it also approved a loan worth PhP 800 million for the Cebu Bulk Water Project. The International Finance Corporation (IFC), the soft loan window of the World Bank, has signed a $100 million fixed-term term loan facility with MWC to partially fund the construction of additional water and wastewater treatment facilities. The fixed-rate term loan has a tenor of 18 years, the longest tenor the IFC has provided to the water sector in the Philippines.
Concerted nationwide effort
The Philippines government is highly committed to improving access to safe water for its residents. Its Development Plan 2011–16 reiterates the need for additional infrastructure investments in the water sector in order to meet growing demand. Towards this end, the government has been mobilising both public and private funds to plug its water supply and wastewater infrastructure deficits. However, given that public funds are limited amidst competing uses, the government has accorded the highest priority to the encouragement of PSP.
Going forward, the government is likely to continue its endeavour to improve water supply facilities. Over the next three–four years, capital expenditure on water and wastewater infrastructure is expected to increase at a compound annual growth rate of about 8 per cent, reaching $690 million in 2018, from $140 million in 2011. Plans are afoot to undertake water-related projects worth $2.3 billion in the next one–two years, which will enable the country to scale up its infrastructure development. The majority of these projects will be implemented through the PPP route.
Among cities, Manila is likely to continue to play a key role in the water sector in the country. Private companies in the Metro Manila area are looking to develop 12 STPs between 2012 and 2016, and another 37 STPs between 2017 and 2037. Over time, the successful implementation of these infrastructure development plans is expected to play a key role in providing adequate and sustained access to drinking water supply and basic sanitation.
