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Manila Water Company, Inc.
Manila Water to boost investments in Leyte project

Ayala-led Manila Water Co. Inc. (MWC), proponent of a water service project in Leyte, has committed to boost investments and assured there would be no tariff adjustments in the first two years of the project as the company focuses on improving service.

MWC partnered with the Leyte Metropolitan Water District (LMWD) for the project. The company also said that while MWC is allowed to make tariff adjustments after 2019, this would be subject to the approval of the Local Water Utilities Administration (LWUA), being the tariff regulator for water districts.

It added that any tariff adjustments would comply with the procedures including public consultations.

“In addition, MWC, through this partnership, will front load its investments to reduce non-revenue water losses aimed at reaching, at least, a world class level of 18 percent, increase water pressure to an appropriate level, and deliver potable water supply 24/7,” it said.

MWC submitted to LMWD in May an unsolicited proposal for a partnership for the design, improvement, upgrade, rehabilitation, and expansion of water supply and sanitation facilities in the province of Leyte, including the city of Tacloban and the relocation sites of the Yolanda victims.

After lengthy and careful review of the proposal and the adoption of the Competitive Challenge process under the NEDA joint venture guidelines, the partnership between MWC and LMWD was established.

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“Pursuant to the partnership, MWC is expected to provide massive investments aimed at improving water and sanitation services where bulk of the investment is expected to be rolled out during the first three years of the project,” MWC said in its proposal.

However, the Tacloban Union of Barangay Officials and Alliance of Water Concessionaires have recently issued unfounded claims and statements on the said partnership, and even issued warnings to the residents of Tacloban City of unnecessary tariff increases when MWC starts its operations.

The city government of Tacloban claims it has the authority to appoint the members of LMWD’s Board of Directors, citing a 2016 decision of the Supreme Court.

But LMWD, for its part, reiterated all members of the BOD (Board of Directors) have valid appointments confirmed by LWUA. Further, all appointed members of the BOD have fixed terms, and are expected by its customers to fulfill its mandate.

LMWD said the Supreme Court decision did not set a precedent with respect to LMWD because of different circumstances.

...for Boracay waters

Manila Water to obtain P2.4-B loan from BPI

MANILA WATER Co., Inc. said its subsidiary serving Boracay island had signed a P2.4-billion loan agreement with the Bank of the Philippine Islands (BPI) in part to cover its five-year budget.

The unit — Boracay Island Water Co., Inc. — signed the fourth omnibus loan and security agreement with the bank on Wednesday, Manila Water told the stock exchange. The companies involved are all subsidiaries of Ayala Corp.

“The loan will be used to finance general corporate requirements and capital expenditures of Boracay Water in fulfillment of its service obligations, as well as refinance an existing loan,” Manila Water said. 

Boracay Water will be spending P2.2 billion in capital expenditure from 2018 to 2022 after the approval of its business plan in its rate rebasing of 2017.

On Wednesday, shares in Manila Water fell 0.18% to P27.95 each.

Boracay Water was formed through a 25-year concession agreement between Manila Water and the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) in 2009. 

The partnership delivers the water and used water requirements of the three Boracay barangays of Manocmanoc, Balabag and Yapak. 

On Dec. 15, Manila Water said the TIEZA regulatory office had approved the implementation of the second of three tranches of new water rates of Boracay Water.

Manila Water plans more emergency reservoirs

MANILA WATER Corp. has started the construction of a 100-cubic-meter underground reservoir that will serve as a potable water source in evacuation centers such as a school in Cainta town, Rizal province.

“Manila Water aims to construct these emergency reservoirs in 22 cities and municipalities within Metro Manila’s East Zone and the Province of Rizal in its commitment to assure water service reliability even during times of calamities such as earthquakes and flooding,” Manila Water said in a statement on Thursday.

The listed company said the reservoir project, which had its groundbreaking recently, will be built at the Cainta Elementary School in Barangay San Roque. It will become a potable water source in the aftermath of disasters and calamities.

Aside from the one in Cainta Elementary School, the company also plans to construct a 50-cubic-meter reservoir in Francisco P. Felix Memorial National High School in Barangay Sto. Domingo.

Manila Water said the emergency reservoirs are designed to provide 10,000 evacuees with potable water up to three days.

In October last year, Manila Water also broke ground on an emergency reservoir project at the Sto. Rosario Elementary School in Barangay Sto. Rosario-Kanluran, Pateros.

In Pateros, reservoirs will also be installed in Pateros Elementary School in Barangay San Pedro and Masikap Covered Court in Barangay Sta. Ana.

Manila Water provides water and wastewater services to Metro Manila’s east zone concession area covering the cities of Makati, Mandaluyong, Pasig, Pateros, San Juan, Taguig and Marikina. It is also in charge for the southeastern parts of Quezon City and Sta. Ana and San Andres in Manila.

Manila Water bags P800-M Isabela project

MANILA WATER Company, Inc. on Monday said it bagged a P800-million water project in Ilagan City, Isabela.

In a disclosure to the stock exchange, the listed company said it received on Jan. 26 the notice of award from the City of Ilagan Water District (CIWD) for a joint venture project for the development and management of a raw water source, provision of bulk water supply and septage management in the city.

After completing the conditions specified in the notice, the consortium, composed of Manila Water and its subsidiary Manila Water Philippine Ventures, Inc. (MWPV), and CIWD will sign a deal to establish the joint venture company.

The joint venture company will then ink a bulk water sales and purchase agreement, and septage management agreement with the CIWD.

Manila Water said the bulk water project is estimated to require over P600 million in capital expenditures (capex), while the septage management component will need nearly P200 million.

“The bulk water supply facilities, when completed and operational by 2020, shall supply treated bulk water to the CIWD of up to 30 million liters per day (MLD),” the company said.

The septage management component is expected to be operational by 2021.

Meanwhile, MWPV subsidiary Laguna Water in a separate statement said it is allocating P1.2 billion this year to improve its water supply network and facilities in the province. Laguna Water is a public-private partnership between the Laguna provincial government and Manila Water.

Laguna Water said it will invest in “various water source development; water network expansion, improvement, and rehabilitation; water service reliability projects; and water facility upgrades.”

The company said it will also begin offering used water services. Its sewage treatment plant in Laguna Technopark, which has been upgraded, will use Organica Food Chain Reactor technology for the treatment of domestic used water.

...regional growth

Ayala-led Manila Water acquires stake in Thailand-based firm East Water

MANILA WATER Co. has signed a share purchase agreement to acquire an 18.72% stake in a publicly listed water supply and distribution company in Thailand, the Ayala-led company told the stock exchange on Monday.

Metro Manila’s east zone water concessionaire said the stake in Eastern Water Resources Development and Management Public Co. Ltd. is the company’s first point of entry in Thailand as part of the its expansion in Southeast Asia.

“Manila Water marks another milestone in its regional growth, as it establishes its presence in Thailand through East Water. We recognize the opportunities this new market presents for us, and we are eager to share the technical expertise and service quality which Manila Water has developed over the last twenty years,” said Fernando Zobel de Ayala, president and chief operating officer of Manila Water.

“From the conglomerate perspective, Ayala sees this development as a strategic entry point into Thailand,” he added.

Mr. Zobel de Ayala, who is also Manila Water board chairman, said with Manila Water leading the way, “we hope to leverage our various capabilities to enlarge our footprint in the country.”

Manila Water said the Thai company provides raw and tap water supply services in the eastern region of Thailand, the country’s main industrial area and home to various heavy industries, including automotive, electronics and petrochemicals.

It said East Water provides raw water supply to three provinces, holds concession contracts to operate in 11 locations, and provides water service to several industrial estates. These areas cover 13,285 square kilometers, which is almost as large as the Calabarzon, the region made up the provinces of Cavite, Laguna, Batangas, Rizal and Quezon.

Ferdinand M. dela Cruz, Manila Water president and chief executive officer said: “Our entry into the Thailand water space aligns squarely with our internationalization strategy, with focus in Southeast Asia.”

He said East Water presents “great potential” as its future growth would come from the Eastern Economic Corridor, the Thai government’s initiative to further develop the country’s eastern seaboard into a leading economic zone in the Association of Southeast Asian Nations.

Manila Water will finance the acquisition through a combination of internally generated funds and bank debt.”

The Ayala company’s foray into Thailand comes after it embarked on bulk water and concession projects in Vietnam. It also conducted pilot projects in Bandung, Indonesia for a non-revenue water reduction program and in Yangon, Myanmar for leakage reduction.

...Ayala company ulit Smile

Manila Water net income climbs 7%

MANILA WATER Co., Inc. recorded a 7% increase in 2017 core net income to P6.5 billion, driven largely by the strong sales of its Metro Manila water concession, the expansion of other local operations and higher supervision fees, the company said on Tuesday.

The “robust” income rise came with a 5% growth in consolidated revenues to P17.7 billion, it told the stock exchange. Net of non-recurring expenses, reported income increased by 1% to P6.1 billion.

“We are proud of our ability to register solid core income growth in 2017, as it highlights the strength of our business, and our people. Building on this foundation, we continue to build our business and expand our market reach, both domestically and in the region,” said Ferdinand M. dela Cruz, Manila Water president and CEO.

“Our organization is now geared up for growth, and we are very excited to take on the opportunities that lie ahead,” he added.

Manila Water said all operating units last year reported “notable growth” in billed volume. The Manila concession grew by 2% as it connected new customers in previously unserved areas. It said with the concession’s continuing expansion, it now serves more than 6.5 million people in the eastern side of Metro Manila.

Its other subsidiaries in the Philippines — operating in Boracay, Cebu, Clark and Laguna, and with the addition of estate water — all posted double-digit billed volume increases, the company said.

Other income net of expenses rose by 20% to P541 million because of the higher equity share in the net income of associates.

Manila Water said its two bulk water companies in Vietnam, Thu Duc Water and Kenh Dong Water, together with Saigon Water, contributed P457 million in net income, up 24% from 2016.

The company said consolidated operating costs and expenses rose by 19% to P7.4 billion, led by the 67% increase in overhead costs to P1.5 billion.

Of the total overhead costs, provision for uncollectible receivables made up 38%. Direct costs, which rose by 12%, was mainly due to higher power and light charges from higher consumption and rates.

“The healthy balance sheet enabled Manila Water to carry out an unprecedented capital expenditure program rollout in 2017,” the company said.

Consolidated capital expenditures increased by 48% to P13 billion after the company’s “intensified infrastructure build-up to lay additional groundwork for future growth. Its strong balance sheet is supportive as well of its new acquisitions.”


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