After months of negotiations, Manila Water Company Inc., the Philippines` largest water utility company, has reached a new concession agreement with the government. The new agreement revamps the terms of the previous contract, which was signed in 1997 and expired in 2022.
Under the new deal, Manila Water will now have its concession extension for another 15 years, or until 2037. The company, which is responsible for providing water and wastewater services to over 6 million customers in Metro Manila, will also invest around Php 80 billion (roughly USD 1.6 billion) in the next five years, including the construction of new wastewater treatment plants, water supply projects, and other infrastructure development.
One of the significant changes in the new concession agreement is the introduction of a “Performance-Based Incentive Scheme” or PBIS, which aims to prioritize and reward the company`s performance in delivering essential services. The PBIS will be determined based on various factors such as customer service satisfaction, business process improvement, operational efficiency, and environmental and social responsibility. The scheme also includes penalties for underperformance, such as water supply disruptions or non-compliance with environmental regulations.
Another key change in the new agreement is the redefinition of certain terms and clauses. For example, the government has clarified that “unbundling” water pricing refers to separating the rates for water supply, wastewater, and other services, while “non-revenue water” accounts for losses due to leaks and theft.
The new agreement also provides for a 50-50 sharing agreement between Manila Water and the government for the joint venture company that will manage the Angat Dam, which supplies approximately 97% of Metro Manila`s water needs. It also mandates the creation of a “Water Crisis Management Office” to address any potential water shortage situations.
Overall, the new concession agreement between Manila Water and the government is expected to be a win-win situation for both parties. Manila Water will continue to provide essential services to its customers and invest in the country`s water infrastructure, while the government ensures the company`s compliance with regulations and customer satisfaction. It also provides a more transparent, performance-based framework for pricing water services, benefiting both the company and its customers.