Metropolitan Cebu Water District’s water management strategies-

The Metropolitan Cebu Water District (MCWD) is a public drinking water utility that caters to the drinking water requirements of the Metropolitan Cebu (Metro Cebu) region in the Philippines. The region faces several issues with regard to water supply. These include uneven distribution of water supply (in terms of hours and pressure), acute dependence on groundwater resources, a high level of non-revenue water (NRW), deteriorating infrastructure and poor service coverage. To tackle these problems, MCWD is now focusing on augmenting water supply infrastructure, utilising surface water resources and improving operations and maintenance (O&M) practices.

Background

According to the latest available data (2014), MCWD produces around 200,000 cubic metres of water per day and serves around 43 per cent of the total water demand in its command area. It supplies water to about 55 per cent of the residents in its service area through 160,000 service connections. As of 2012, MCWD sources water from 103 deep wells and one surface water source and maintains over 800 km of distribution mains. However, several issues plague the existing water supply system. According to the Asian Development Bank’s (ADB) “Urban Water Supply and Sanitation in Southeast Asia – A Guide to Good Practice”, 2014, MCWD’s service coverage in Metro Cebu is extremely poor and is estimated to be 16.5 persons per connection. Excessive extraction of groundwater has led to the intrusion of salinity in the water table. Further, the NRW level of MCWD is also in excess of 25 per cent (2012).

Initiatives to improve water supply

MCWD has taken several measures to address these issues. It entered ADB’s Water Operators’ Partnership Programme in June 2008. As part of this partnership, MCWD worked with City West Water, a water utility in Melbourne, Australia, to improve its operational performance and to reduce the level of NRW. Four key objectives were identified – reduction of NRW in a pilot area using district metering and associated technology, improving distribution of water supply through hydraulic modelling, using geographic information system for effective asset management, and improving the overall management information system. In addition to these, initiatives were undertaken to build institutional capacity for improved performance management, improved financial management and for provision of customer services, among others. The major outcomes of the programme included reduction of NRW in the pilot area to 11.6 per cent, which was below the target of 15 per cent, building MCWD’s asset inventory to introduce better asset management practices and the commencement of organisational restructuring.

Recently, in April 2014, the Japan International Cooperation Agency signed a grant agreement with the national government to provide a grant of a total of up to 1,165 million yen as assistance for the Project for Improvement of Water Supply System in Metropolitan Cebu Water District. Through this project, a supervisory control and data acquisition system will be installed and measuring apparatus (including flow meters, pressure gauges, water level gauges and non-suspension piping construction) will be provided. This will assist MCWD monitor water supply continuously, optimise water distribution and resolve customer grievances in an efficient manner. The system is expected to be operationalised by February 2016.

Carmen Bulk Water Supply project

Apart from the measures mentioned above, MCWD is also taking steps to augment water supply and improve its revenues. It has recently undertaken the Carmen Bulk Water Supply project to reduce dependence on groundwater. The project is being implemented by Cebu Manila Water Development (CMWD), a joint venture between the Cebu provincial government and the Manila Water Company. So far, this is MCWD’s biggest bulk water supply project and it has a total production capacity of 35,000 cubic metres of water per day.

The project sources water from the Luyang river in Carmen and has led to augmentation of water supply in the cities of Mandaue and Lapu-Lapu, and in the municipalities of Cordova, Consolacion and Compostela. It was partially operationalised in January 2015 and has led to an increase in water production capacity by 18,000 cubic metres per day. This is expected to benefit about 14,000 households. With the commissioning of this project, MCWD has increased its water distribution rate to 46 per cent (earlier 43 per cent). The project is expected to operate at full capacity by 2016.

Further, MCWD has also increased water supply tariffs by 12 per cent from January 2015 onwards as part of the project terms. Earlier, the tariffs were pegged at PhP 13.6  per cubic metre for the first 10 cubic metres of water, PhP 15 for 11 to 20 cubic metres, PhP 17.65 for 21 to 30 cubic metres and PhP 48.40 for 31 cubic metres and beyond. The new rates are PhP 15.2 for the first 10 cubic metres of water, PhP 16.8 for 11 to 20 cubic metres, PhP 19.77 for 21 to 30 cubic metres and PhP 48.4 for consumption beyond 31 cubic metres. Prior to this increase, water tariffs were last revised in 2006.

This revision in tariff is expected to result in additional revenues of PhP 80 million for MCWD. The water utility is planning to utilise these funds to finance a pipeline improvement project since Cebu district is expected to receive additional bulk water supply of 18,000 cubic metres per day from CMWD in December 2015 and 5,000 cubic metres per day from the Danao City Bulk Water Supply project in 2015.

Other measures

MCWD also proposes to build 10 to 20 concrete and steel water reservoirs by 2018 to ensure continuity of water supply despite leakages or fluctuations in electrical voltage. At present, fluctuations in voltage result in disruption of water supply services for extended periods of time. The reservoirs will have the capacity to store 500,000 litres of water each and will be equipped with generator sets to produce water even during power shortages. MCWD has allotted an amount of PhP 50 million for the project.

Further, with the revenue accrued through the revision of tariffs, MCWD is planning to increase its water production capacity by 29,500 cubic metres in 2015 and 17,000 cubic metres in 2016. The water utility is also planning to increase the number of water service connections by 15,211 in 2015 and by 15,589 in 2016 and lay about 41.98 km of pipelines for the additional consumers in the current year. Similarly, it aims to reduce NRW to 23.11 per cent in 2015 and 21.49 per cent in 2016.

The way ahead

The total water demand in Metro Cebu is projected to increase to 416,000 cubic metres per day by 2020. Accordingly, MCWD has intensified its efforts to improve water supply in the region. It is planning to invest PhP 4 billion to provide 320,000 service connections and cover 65 per cent of the population in its area by 2020. However, to ensure that these efforts are translated into significant outcomes, the water utility needs to improve its financial position. Further, the water supply sector in Metro Cebu is characterised by the presence of unregulated operators. In this regard, greater political will and a better regulatory policy environment will benefit the company.