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THE
Metropolitan Waterworks and Sewerage System (MWSS) and
the Manila Water Co. Inc. (MWC) will evaluate the
viability of extending by at least another 10 years the
concession period covering the East Zone as a way of
mitigating the impact of tariff adjustments that may
arise from new water projects.
In an
interview, MWSS chief regulator Eduardo C. Santos said
the recommendation for an extension was included in the
rate rebasing plan submitted by MWC.
“There
is a request from the concessionaire for an extension in
the rolling period. We are done with the 10 years so
there’s still 15 years remaining. But if you compute the
tariff on the basis of the remaining years versus let’s
say 25 years, the tariff adjustment will be higher
within the 15-year period because you are spreading the
cost over a shorter period of time,” he said.
He said
the recommendation is still up for thorough deliberation
and public consultation.
MWC won
the contract to operate and develop for 25 years, or
until 2022, the East Zone water concession via a
competitive bidding conducted by MWSS in 1997.
There is
a provision, however, in the agreement that the
concession period may be extended as long as there is a
mutual accord between the parties.
In a
separate interview, MWC chief finance officer and
treasurer Sherisa P. Nuesa told BusinessMirror an
extension of the concession period will not only help
lessen the effect of tariff adjustments, but also allow
the concessionaire to borrow or source financing for
future water source projects and avert shortage in water
supply.
“It will
be hard to secure a long-term loan facility from
financing institutions on a 15-year concession,
especially with projects that require long period of
planning,” she said.
MWC, a
subsidiary of the Ayala group, submitted to the MWSS
Regulatory Office in March its business plan for the
East concession for the next five years or from 2008 to
2012.
While
service delivery to its more than 5 million customers
has remarkably improved over the last 10 years, it said
significant work still needs to be done to further
improve services in the East zone.
The
Reliability Investment Plan proposed by MWC is geared
toward providing customers with uninterrupted water and
wastewater services even in the event of natural
disasters such as earthquakes and typhoons.
On the
other hand, the Expansion Investment Plan focuses on
addressing both the water and wastewater needs of the
currently unserved areas, particularly those in the
Rizal province.
While it
has relatively covered the Central Distribution System
in terms of water services, some areas in Taguig,
Antipolo, San Mateo and Rodriguez still depend on deep
wells for their water supply.
In order
to address the water demand of these areas, MWC proposes
a network expansion program to provide surface water
supply to these areas.
Another
component of the Expansion Investment Plan is the
development of new water sources such as the Laiban Dam,
Rodriguez Water Treatment Plant and the Rizal Province
Water Supply Improvement Project in response to the
anticipated increased water demand due to population
growth in the East Zone. This component is aligned with
the MWSS New Water Sources Road Map.
In terms
of wastewater, MWC proposes the adoption of the MWSS
Wastewater Master Plan which primarily involves the
construction of combined sewage-drainage treatment
systems. |
