leadership forum on water supply and sanitation - paredes presentation

8/6/2019 Leadership Forum on Water Supply and Sanitation - Paredes Presentation

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M etropolitan

C ebuW ater

D istrict

M etropolitan

C ebuW ater

D istrictMain Office:Main Office:

MagallanesMagallanes CorCor LapuLapu --LapuLapu StreetStreetCebu City, PhilippinesCebu City, Philippines

The views expressed in this paper/presentation are the views of the author and do not necessarilyreflect the views or policies of the Asian Development Bank (ADB), or its Board of Governors, or thegovernments they represent. ADB does not guarantee the accuracy of the data included in thispaper and accepts no responsibility for any consequence of their use. Terminology used may notnecessarily be consistent with ADB official terms.



The Experience of The Experience of Metro Cebu Water DistrictMetro Cebu Water District

ininFinancial SustainabilityFinancial Sustainability



Japan

China

Russia

IndonesiaMalaysia

Hong Kong

Thailand

Vietnam

P a c i f i c

O c e a n

GuamPhilippinesPhilippines

Australia



RepublicRepublicof theof the

PhilippinesPhilippines

Manila



CebuProvince

Metro Cebu



Mactan Is.

Metro CebuMetro CebuMetro CebuCebu CityCebu City MandaueMandaue CityCity

ConsolacionConsolacionLiloLilo --anan

CompostelaCompostela

TalisayTalisay CityCity LapuLapu --LapuLapu CityCity

CordovaCordova

MCIA



Profile of Metro Cebu Water District (MCWD)Profile of Metro Cebu Water District (MCWD)

Size of Service Area :Size of Service Area : 750.87 sq. km.750.87 sq. km.

Population of Service Area : 1.84 million (Est.)Population of Service Area : 1.84 million (Est.)

Key Performance IndicatorsKey Performance Indicators (As of Sept.30, 2008)(As of Sept.30, 2008)

% of Population Served :% of Population Served : 55%55%% of Total Demand Supplied:% of Total Demand Supplied: 42%42%

Total No. of Service Connections:Total No. of Service Connections: 119,249119,249

Average Hours of Supply :Average Hours of Supply : 21 hrs/day21 hrs/dayAverage Tariff :Average Tariff : P26/cu.m.($.54/cu.m.) @ P48/$1P26/cu.m.($.54/cu.m.) @ P48/$1

NRW : 29%NRW : 29%



Financial InformationFinancial InformationAs of Dec.31, 2007As of Dec.31, 2007

Gross Revenue :Gross Revenue : P 1,077,884,721 ($22,455,900)P 1,077,884,721 ($22,455,900)

% Collection Efficiency : 94%% Collection Efficiency : 94%

O & M Expenses : P 615, 197,040 ($12,816,600)O & M Expenses : P 615, 197,040 ($12,816,600)(Excluding Depreciation & Interest)(Excluding Depreciation & Interest)

Net Income : P 229,054,542 ($4,751,100) (AfterNet Income : P 229,054,542 ($4,751,100) (AfterDepreciation & Interest)Depreciation & Interest)

Long Term Debt : P 1,210,586,313 ($25,220,500)Long Term Debt : P 1,210,586,313 ($25,220,500)

* Creditor :* Creditor : Development Bank of the PhilippinesDevelopment Bank of the Philippines



Regulatory Structure of Water DistrictsRegulatory Structure of Water Districts

Number of Water District Board MembersNumber of Water District Board Members : Five(: Five( 55 ))Representing : Civic, Business, Education,Representing : Civic, Business, Education,

Professional & WomenProfessional & Women ’’s Sectorss Sectors

Board Appointing AuthorityBoard Appointing AuthorityMayor or Governor depending on theMayor or Governor depending on the

distribution of total active service connections.distribution of total active service connections.

Tariff RegulatorTariff Regulator ::Local Water Utilities Administration (LWUA)Local Water Utilities Administration (LWUA)



Water District Tariff Guidelines UnderWater District Tariff Guidelines UnderPD 198PD 198

The District, as far as practicable, shall fix such rates andThe District, as far as practicable, shall fix such rates and

charges for water as will result in revenues which will:charges for water as will result in revenues which will:a)a) Provide for reimbursement from all new water customers forProvide for reimbursement from all new water customers forthe cost of installation of new services and meter.the cost of installation of new services and meter.

b)b) Provide for revenue from all water deliveries and servicesProvide for revenue from all water deliveries and servicesperformed by the districtperformed by the district

c)c) Pay the operating expenses of the districtPay the operating expenses of the district

d)d) Provide for the maintenance and repair worksProvide for the maintenance and repair works

e)e) Provide a reasonable surplus for replacement, extension andProvide a reasonable surplus for replacement, extension andimprovements, andimprovements, and

f)f) Pay the interest and principal and provide a sinking fund forPay the interest and principal and provide a sinking fund for

the payment of debts of the district as they become due.the payment of debts of the district as they become due.



MCWD Water Tariff StructureMCWD Water Tariff StructureEffective June 2006Effective June 2006

At average tariff ofAt average tariff of PhP26 (US 54 cents) perPhP26 (US 54 cents) per cu.mcu.m ..

complies with the tariff guidelines of P.D.198complies with the tariff guidelines of P.D.198

ForFor ½”½” Regular Connection:Regular Connection:

Monthly Service ChargeMonthly Service Charge( first 10( first 10 cu.mcu.m . ). ) PhPPhP 136.64136.6411 to 2011 to 20 cu.mcu.m .. PhPPhP 15.01 per15.01 per cu.mcu.m ..

21 to 3021 to 30 cu.mcu.m .. PhPPhP 17.64 per17.64 per cu.mcu.m ..3131 cu.mcu.m .. -- UpUp PhPPhP 48.38 per48.38 per cu.mcu.m ..



Requirements forRequirements for Tarriff Tarriff IncreasesIncreases1. Cash Flow Projection ( 3 to 5 years )1. Cash Flow Projection ( 3 to 5 years )

--Planned investments, debt service payments, O&M expenses w/ Planned investments, debt service payments, O&M expenses w/ inflation, NRW improvementsinflation, NRW improvements

--Pass on formulasPass on formulas

2. Public Hearing2. Public Hearing3. Service Charge for3. Service Charge for ½”½” Regular Connection shouldRegular Connection should

not exceed 5% of monthly salary of the Lownot exceed 5% of monthly salary of the LowIncome GroupIncome Group

4. Each increase in tariff should not go beyond 60% of4. Each increase in tariff should not go beyond 60% ofthe previous onethe previous one

5. Review by the Local Water Utilities Administration5. Review by the Local Water Utilities Administration



Service Coverage Expansion ProjectionsService Coverage Expansion Projections20082008 20092009 20102010 20112011 20122012

Supply(MSupply(M 33/day)/day) 118.4118.4 129.4129.4 149.3149.3 169.2169.2 186.2186.2Niche Demand(MNiche Demand(M 33/day)/day) 169.8169.8 172.7172.7 175.8175.8 178.9178.9 182.1182.1Total Demand (MTotal Demand (M 33/day)/day) 280.3280.3 285.5285.5 290.9290.9 296.4296.4 302.1302.1

Niche Demand represents the water requirement of Niche Demand represents the water requirement of

existing water utility customers plus a percentage of theexisting water utility customers plus a percentage of theunservedunserved that are willing to be connected to the water that are willing to be connected to the water utility.utility.

Area not covered by MCWD are getting their water Area not covered by MCWD are getting their water from public or private wells, local water suppliers, or byfrom public or private wells, local water suppliers, or bytruck delivery.truck delivery.



Future Water SourcesFuture Water SourcesGround waterGround water

Surface Water ( Rivers, Lakes, etc. )Surface Water ( Rivers, Lakes, etc. )Sea Water / Brackish Water ( Desalination )Sea Water / Brackish Water ( Desalination )



PSP Opt ion sPSP Opt ion s

•• BOTBOT•• Bulk Supply ContractsBulk Supply Contracts

•• Joint Venture AgreementsJoint Venture Agreements



K ey Fea t u res o f Financ ia l lyK ey Fea t u res o f Financ ia l lySus t a inab le Wat e r Ut i l i t i e sSus t a inab le Wat e r Ut i l i t i e s1.1. Cost Recovery PricingCost Recovery Pricing2.2. Ring Fenced RevenuesRing Fenced Revenues

3.3. Autonomy and AccountabilityAutonomy and Accountability4.4. Incentives for Reforms and PenaltiesIncentives for Reforms and Penalties

for Failuresfor Failures5.5. Use of Progressive PerformanceUse of Progressive PerformanceStandardsStandards



The Experience of The Experience of Metro Cebu Water DistrictMetro Cebu Water District

ininFinancial SustainabilityFinancial Sustainability

ENGR. ARMANDO H. PAREDES

General Manager

leadership forum on water supply and sanitation - paredes presentation

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