By IGNACIO R. BUNYE
There are three sides to any argument: 1. Your Side, 2. My Side, and 3. The Correct Side.
Allow to present “My Side,” meaning Manila Water side. In the interest of full disclosure, let me state that I am an independent director of Bank of the Philippine Islands which is related to Manila Water by virtue of their common ownership by Ayala.
As a BPI director, I am very familiar with the bank’s corporate governance culture which is very much aligned to that of Manila Water, as well as to other members in the Ayala group. The Ayala Group culture emphasizes leadership, excellence, integrity, teamwork, customer orientation, and sustainable development that goes beyond the bottom line.
From where I sit, these are the pure, true, and unadulterated facts.
- In 1997, the Philippine government, led by President Fidel V. Ramos, solicited bids for concession agreements with Metropolitan Waterworks and Sewerage System (MWSS) to address the water crisis in Metro Manila.
- At that time, MWSS was no longer capable of maintaining viable operations due to technical inefficiencies and enormous financial debts.
- The government unilaterally determined the terms of the Concession Agreement, which were bidded out on a take-or-leave-it basis.
- The Concession Agreement contains a procedure for the adjustment of the water rates in accordance with the MWSS Charter.
- The Republic of the Philippines undertook to respect the procedure which is under the full control of the MWSS from beginning to end.
- In 2009, the administration of President Gloria Macapagal Arroyo extended the Concession Agreement up to 2037 upon recognizing the compelling need for more water and waste water investments.
- Manila Water was one of many local and international corporations which responded to the government’s call for public-private partnership meant to solve the water crisis.
- Manila Water offered the lowest fee to serve as concessionaire of MWSS, which decided to pay the fee with the water tariff to be collected by the concessionaire.
- Manila Water was subsequently awarded the Concession Agreement for the East Zone.
- Manila Water has diligently discharged its obligations as concessionaire of MWSS, spending over P166 billion to improve water and wastewater services. Under the extended agreement, Manila Water commits to spend another P458 billion all the way up to 2037.
- Manila Water has installed over 5,500 kilometers of pipes and built 2 new filter plants, 32 reservoirs, 113 pumping and booster stations, 40 additional facilities, and five times more sewer network capacity.
- This resulted in the expansion of the water service coverage in the East Zone from 67% coverage serving around three million people to 93% serving over seven million people.
- This includes an additional two million customers from the poor and marginalized sector, who used to buy vended water in buckets or pails delivered by vendors in pushcarts.
- Prior to Manila Water, 63% of every liter produced never reached the intended customer because of broken MWSS pipes and pilferage. Manila Water was able to reduce “system loss” or non-revenue water to only 11%. This is at par with international standards of water distribution efficiency.
- An ADB study says the reduction in system loss is equivalent to having built a new water dam!
- Raul Fabella, the only living National Scientist in Economics, once said: “The privatization of the MWSS was clearly a triumph of the principle of comparative competence – the private sector proved more competent at the delivery of water and sewerage services than the state. It is now considered a singularly successful structural reform in the annals of Philippine political economy.”
Question: Did Manila Water live up to its end of the Concession Agreement?
As my good friend and fellow former Press Secretary Chito Villanueva is fond of saying: “You be the judge!”
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Tags: Ignacio R. Bunye