The “Bulacan People won” professed Gerardo Esquivel, administrator of the Metropolitan Waterworks and Sewerage System (MWSS). The people of Bulacan was the value driver of the recently awarded 30-year concession Bulacan Bulk Water Supply Project under the build-operate-transfer modality.
PPPs for the public good. The 12th public-private partnership (PPP) arrangement awarded under the current a dministration captures the real bottom line. The MWSS leadership clearly wanted to serve the general welfare by “equalizing” water, a human right, and making available to the inhabitants of the locus of water their water.
Lowest tariff, not highest revenues. The MWSS choose to award the project to the proponent that offered the lowest tariff, instead of giving premium to revenues or concession fees. The low tariff that will be paid by the 24 water districts will translate to low end-user fees to be paid by Bulakeños. The benefit is targeted and will be directly felt by 3.4 million people in 21 cities and municipalities. The proponent is expected to innovate so that it may be able to save on whole-of-life project costs.
Free and open competition led to lowest price. Three top Philippine corporations submitted bids and participated in the competitive selection process.
The consortium of San Miguel Corp. and Korea Water Resources Corp. won over two other reputable firms—Manila Water Co. Inc., a concessionaire of hte MWSS, and Prime Water Infrastructure Corp., an active PPP proponent with water districts. The winning bid of P8.50 per cubic meter as initial bulk-water charge bested the other offers. Judging from the bids submitted, all three wanted to get the project.
Game changer as it sets the comparator. This project sets the new bar for bulk-water projects. The total project cost-bulk water charge ratio established by the winning proponent can now serve as comparator for future projects. This is truly a game changer.
Opens door for more PPPs. The award of this project paves the way for other PPPs. The Bulacan water districts can enter into distribution joint ventures. Septage and sewerage PPPs can be pursued by local governments. The MWSS can undertake other bulk-water projects in other provinces. Water, indeed, is the next big thing in PPPs.
People-driven “future-proofing.” The Project will face what every PPP project faces—successor risk. The challenge now is how to “future-proof” this “legacy” project beyond the term of the current MWSS
leadership.
One way of addressing successor risk is securing the support of the people. The real “P” in a PPP—the public—must be engaged and informed.
The 3.4 million Bulakeños must realize they are the real winners of this PPP.
To ensure success and continuity, they must constructively engage the MWSS and the proponent. They can form a “Project Watch” to ensure compliance with standards and deliverables. It is hoped that the people themselves will champion and defend the project.
This is not a run-of-the-mill PPP. The MWSS went against the current. This is truly a sea change of a PPP. Kudos. We need more of this.