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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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5

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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13

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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14

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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15

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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19

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!