EconomyEditor's PickManila Water to prequalify contractors for Wawa water treatment plant

November 4, 2021

EAST ZONE water concessionaire Manila Water Co., Inc. announced a prequalification process for contractors seeking to participate in the design and construction of a water treatment plant in Antipolo City.

The company said Thursday that potential bidders to send a letter of intent on or before Nov. 26 for the Wawa Water Treatment Plant contract, which will supply an additional 438 million liters per day (MLD) of water to its customers.

Manila Water expects to issue invitations to bid by the first quarter of 2022.

“The project, when completed, shall be capable of treating raw water with a product water quality that is in full compliance with the Philippines National Standards for Drinking Water of 2017 and the employer treated water quality output requirements, and serve the client network for Antipolo and neighboring municipalities,” Manila Water said.

Manila Water has an offtake agreement with the Metropolitan Waterworks and Sewerage System (MWSS) and WawaJVCo, Inc. to supply raw water from the Wawa and Tayabasan rivers.

The first phase involves the supply of 80 MLD of raw water by Dec. 31, 2021 while the second phase involves the 438 MLD raw water deal, which kicks in on Dec. 31, 2025.

Separately, the MWSS Regulatory Office said Thursday that its board of trustees approved the removal of the foreign currency differential adjustment (FCDA) from customer water bills issued by Manila Water and Maynilad Water Services, Inc. starting Nov. 18.

Nov. 18 is the date the revised water concession agreements come into force. The deals called for of a tariff freeze until Dec. 31, 2022 and the removal of the FCDA.

The FCDA for Manila Water customers was 0.84% of the 2021 average basic charge of P28.52 per cubic meter (cu.m.) or 24 centavos.

Households consuming 10 cu.m. or less will experience a reduction of P1.26, while those consuming 20 cu.m. and 30 cu.m. will see a decrease of P2.79 and P5.69, respectively.

The impact on Maynilad customers, whose FCDA was equivalent to minus 0.55% of the 2021 average basic charge of P36.24 per cu.m. or minus P0.20 per cu.m., will increase standard rates for water and sewerage services.

The MWSS said Maynilad’s FCDA will instead be converted into a transitory adjustment in water bills between Nov. 18, 2021 to Dec. 31, 2022 as a consumer protection measure.

“The cash flow effect of the FCDA removal will be considered in the calculation of the opening cash position of the concessionaire in the 5th Rate Rebasing Exercise,” MWSS said.

Asked to comment, MWSS Chief Regulator Patrick Lester N. Ty said by mobile phone that the water bills of Maynilad customers will not increase.

“In order to protect the interest of the public, we converted it to a transitory adjustment so their monthly water bill will not increase and remain the same. Maynilad can just include this in the next rate rebasing,” Mr. Ty said.

The FCDA is a tariff mechanism, reviewed quarterly, which allows concessionaires to regain losses or return gains as a result of foreign exchange rate movements. The water providers pay concession fees in foreign currency to the MWSS, and also make non-peso payments on their loans.

Metro Pacific Investments Corp., which has a majority stake in Maynilad, is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Revin Mikhael D. Ochave

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