Water privatization in Metro Manila: Difference between revisions
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'''Impact'''. Manila Water achieved significant improvements in East Manila. Between 1997 and early 2008 the population seved increased from 3 to 5.1 million, non-revenue water declined from 63% to 22%, the share of customers with continuous water supply incrased from 26% to more than 98% and labor productivity increased |
'''Impact'''. Manila Water achieved significant improvements in East Manila. Between 1997 and early 2008 the population seved increased from 3 to 5.1 million, non-revenue water declined from 63% to 22%, the share of customers with continuous water supply incrased from 26% to more than 98% and labor productivity increased , as evidenced by a decline of the number of staff per 1000 connections from 9.8 to only 1.6. At the same time, tariff also increased.<ref name="GWI 2008"> Global Water Intelligence:[http://www.globalwaterintel.com/archive/9/3/general/manila-water-goes-from-strength-to-strength.html Manila Water goes from strength to strength], Vol 9, Issue 3 (March 2008) </ref> As of the end of 2009 the number of customers reached 6.1 million, non-revenue water had further declined to only 16% and staff productivity stood at 1.4. A study by the University of the Phillipines showed that the percentage of people judging the utility"s performance as "very good" increased from 28% to 100% in 2009. Despite tariff incrases, residential tariffs stand at only US$0.15/m3 and thus are 20 times cheaper than water sold by vendors.<ref name="Rivera"> Regulation and corporate innovation:The case of Manila Water, by Perry Rivera, in:Transforming the world of water, Global Water Summit 2010, Presented by Global Water Intelligence and the International Desalination Association </ref> Sanitation services, however, still have a long way to go. In the East Zone, only 10% of people have sewerage connections, with the other 90% relying on septic tanks, which Manila Water is obliged to empty.<ref name="GWI 2008"/> Manila Water plans to invest US$1 billion in sanitation between 2011 and 2018 to bring sewerage coverage to 70%.<ref name="Rivera"/> |
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== See also == |
== See also == |
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Revision as of 20:06, 14 February 2011
Water privatization in the Philippines was initiated by the government of Fidel V. Ramos through the privatization of the Metropolitan Waterworks and Sewerage System (MWSS) for Metro Manila.[1]
Situation before privatization. The plan to privatize MWSS emerged from the inability of the public utility MWSS to expand coverage to the growing population. By 1996, MWSS only provided water supply for on average 16 hours each day to two thirds of its coverage population. According to the Asian Development Bank, the share of non-revenue water (NRW), water which is not billed e.g. due to leakage and illegal connections was more than 60%, an extremely high percentage even compared to developing countries and much higher than in Seoul (35%), Kuala Lumpur (36%) and Bangkok (38%).[2] Furthermore, MWSS depended on government subsidies due to poor cost recovery.
Concession awards for East and West Manila in 1997. In 1995, the Water Crisis Act was passed, providing the legal framework for the privatization of MWSS. The private participation was implemented through a concession contract, in which the concessionaires were given the task to operate and manage the facilities, whereas MWSS preserved the ownership of the infrastructure.[3] In order to facilitate benchmark comparisons, the service area was divided in two zones. In 1997, the Maynilad Water Services, Inc., a joint venture by the French Suez and the Filipino Benpres Holding was awarded the concession contract for the West Zone, whereas the Manila Water Company, Inc., consisting of the Filipino Ayala Corporation as well as the British United Utilities and the US company Bechtel was awarded the East Zone. The concession contracts were for 25 years and included targets concerning coverage, service quality and economic efficiency. An objective was to increase water coverage in Metro Manila to 96% by 2006. The companies were expected to be regulated by the newly created MWSS Regulatory Office.
The first years. After the concession came into force, tariffs at first decreased, but were then increased and reached the pre-privatisation level in 2001/2002. Public opposition against the tariff increases soon emerged. At the same time, the concessionaires were faced with a severe drought and the Asian financial crisis. Because of the rapid currency devaluation, MWSS' dollar-denominated debt service doubled. Consequently, tariffs continued to rise and targets concerning coverage and NRW were adjusted downwards with agreement of the regulatory agency. After all, Maynilad went bankrupt in 2003 and was turned over to MWSS in 2005. On the other hand, Manila Water had begun to make profit by 1999 and performed well financially as well as concerning reduction of NRW.[4]
Impact. Manila Water achieved significant improvements in East Manila. Between 1997 and early 2008 the population seved increased from 3 to 5.1 million, non-revenue water declined from 63% to 22%, the share of customers with continuous water supply incrased from 26% to more than 98% and labor productivity increased substantially, as evidenced by a decline of the number of staff per 1000 connections from 9.8 to only 1.6. At the same time, tariff also increased.[5] As of the end of 2009 the number of customers reached 6.1 million, non-revenue water had further declined to only 16% and staff productivity stood at 1.4. A study by the University of the Phillipines showed that the percentage of people judging the utility"s performance as "very good" increased from 28% to 100% in 2009. Despite tariff incrases, residential tariffs stand at only US$0.15/m3 and thus are 20 times cheaper than water sold by vendors.[6] Sanitation services, however, still have a long way to go. In the East Zone, only 10% of people have sewerage connections, with the other 90% relying on septic tanks, which Manila Water is obliged to empty.[5] Manila Water plans to invest US$1 billion in sanitation between 2011 and 2018 to bring sewerage coverage to 70%.[6]
See also
Water supply and sanitation in the Philippines
Further reading
Jude Esguerra:New Rules, New Roles: Does PSP Benefit the Poor? The Corporate Muddle of Manila's Water Concessions, WaterAid, 2003
References
- ^ Llanto, Gilberto M. (December 2002). "Infrastructure Development: Experience and Policy Options for the Future" (PDF). Discussion Paper Series. 2002 (26). Philippine Institute for Development Studies. Retrieved 2008-04-08.
{{cite journal}}: Cite has empty unknown parameter:|coauthors=(help), p. 34 - ^ McIntosh, Arthur C. (October 1997). "Second Water Utilities Data Book – Asian and Pacific Region" (PDF). Asian Development Bank. ISBN 971-561-125-7. Retrieved 2008-04-25.
{{cite journal}}: Cite journal requires|journal=(help); Unknown parameter|coauthors=ignored (|author=suggested) (help), p. 4-7 - ^ Llanto, Gilberto M. (December 2002). "Infrastructure Development: Experience and Policy Options for the Future" (PDF). Discussion Paper Series. 2002 (26). Philippine Institute for Development Studies. Retrieved 2008-04-08.
{{cite journal}}: Cite has empty unknown parameter:|coauthors=(help), p. 36 - ^ Wu, Xun (2008). "A Tale of Two Concessionaires: A Natural Experiment of Water Privatisation in Metro Manila". Urban Studies. 45 (1): 207–229. doi:10.1177/0042098007085108.
{{cite journal}}:|access-date=requires|url=(help); Unknown parameter|coauthors=ignored (|author=suggested) (help), p. 212-217 - ^ a b Global Water Intelligence:Manila Water goes from strength to strength, Vol 9, Issue 3 (March 2008)
- ^ a b Regulation and corporate innovation:The case of Manila Water, by Perry Rivera, in:Transforming the world of water, Global Water Summit 2010, Presented by Global Water Intelligence and the International Desalination Association