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Securing the Future Today
The Manila Water-MWSS PPPEnabling a Successful Wastewater Management
Program
VIRGILIO C. RIVERA, JR.Group Director, Regulation and Corporate Development
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2
The Philippine government, through the MWSS, established a
successful PPP framework in 1997, which has provided the mostprogressive and dynamic water regulatory system in the
country.
Manila Water’s wastewater management program has requireda multipronged approach in Metro Manila’s East Zone.
The success of Manila Water’s wastewater program in the East
Zone is made possible through a concession which ensures theintegration of the whole water supply chain and full cost
recovery.
Key Messages
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3
Conditions before Privatization
Illegal Connections
Low water pressure to
no water
Leaks
Low Water Pressure No Water
POOR
SERVICE
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Conditions before Privatization
WATER SUPPLY AVAILABILITY:
3.1M Customers
Only 26%had access to
24/7Water Supply
1000 mldin System
Losses
Only 3%Sanitation
Coverage
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1997 Regulatory Reform “PPP"
Metro Manila,
Philippines
WEST ZONEEAST ZONE
Metropolitan Waterworks andSewerage System (MWSS)
NATIONAL WATER CRISIS ACT
CONCESSION
AGREEMENT
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Population
(Million)
Water
Availability
(hrs/day)
Water
Coverage
(% of Pop)
Non-
Revenue
Water
(% of Prod)
Staff/1000
Connections
Manila East Zone: Before and After
1996 3.1 16 58 63 9.8
2010 Dec 6.1 24 99 11 1.4
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The Philippine government, through the MWSS, established a
successful PPP framework in 1997, which has provided the mostprogressive and dynamic water regulatory system in the
country.
Manila Water’s wastewater management program has requireda multipronged approach in Metro Manila’s East Zone.
The success of Manila Water’s wastewater program in the East
Zone is made possible through a concession which ensures theintegration of the whole water supply chain and full cost
recovery.
Key Messages
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Wastewater Challenges
The uncontrolled urbanization
of Metro Manila underlies poverty,
congestion, and environmental
pollution
In 1997, only 3% of Metro Manila had access
to sewerage system
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Wastewater Challenges
35 percent reside in informal
"slum" settlements withimproper sanitation facilities
Wastewater continues to
discharge to rivers, morethan half of which come
from households
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Current Scenario
SEPTIC TANK SEPTIC TANKSEPTIC TANK
DRAINAGEOne of thecauses of flooding
Note:Septic tank requiresregular desludgingevery 5- 7 years
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MWC Wastewater Management Program:
A Multipronged Approach
SeptageManagement
Separate SewerNetwork
Combined Sewer
Network
1
2
3
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Wastewater in the East Zone:
Before and After Manila Water
40 mldWastewater
Capacity
135 mldWastewater
Capacity
3%Wastewater
Coverage
2STPs
1997
23%Wastewater
Coverage
38STPs
2010
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San Juan River
Catchment
Marikina River
Catchment
Pasig River Catchment
1997
2022
2008 2010
2037
16% 23%3%
100%
3-River system100%
East Zone
San Juan River
Catchment
Marikina River
Catchment
Pasig RiverCatchment
Expansion of Wastewater Services
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The Philippine government, through the MWSS, established a
successful PPP framework in 1997, which has provided the mostprogressive and dynamic water regulatory system in the
country.
Manila Water’s wastewater management program has requireda multipronged approach in Metro Manila’s East Zone.
The success of Manila Water’s wastewater program in the East
Zone is made possible through a concession which ensures theintegration of the whole water supply chain and full cost
recovery.
Key Messages
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2007 2008 2009 2010 2011 2012
Environmental Charge (allcustomers)
10% 12% 12% 16% 18% 20%
SEPARATE Sewer Network
Residential Sewer Charge 50% 40% 40% 20% 10% 0%
Commercial SewerCharge
50% 45% 45% 35% 30% 30%
COMBINED Sewer System
Residential Sewer Charge 0%
Commercial SewerCharge
0%
Wastewater Charges are Embedded in Tariffs
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Rate Rebasing
Inflation Adjustment
Foreign Currency
Differentials Adjustment
Extraordinary
Price Adjustments
Allows FULL RECOVERY of prudent costs andgenerate reasonable return on investments
5 years
Annual
Quarterly
As needed
Tariff Setting Mechanism
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Invested nearly a billion dollars into the system
1997 2010
DEC
1997 2010
TARIFF/m3 CAPEX (Cumulative)PhP 33.54
Php 4.02
PhP 42B
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Solid Financial Performance
-3000
0
3000
6000
9000
12000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006* 2007* 2008* 2009*
Revenues
EBITDA
NET INCOM E
REVENUE:
US$250M
EBITDA:
US$170M
NET INCOME:
US$90M
1997 2010
1 USD = 44 PHP
18
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A balanced PPP framework and dynamic concession
agreement lead to investments and fulfillment of serviceobligations.
Manila Water’s multipronged, customized approach
explains the early successes in its wastewater
management program.
Water supply chain integration and full-cost recovery
ensure the sustainability of Manila Water’s wastewater
program over the life of the concession.
Summary
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THANK YOU!