1997 Water Concession Agreements

Neither company has met its contractual objectives of improving access. The improvement in the quality of access and service has been slow in the early years, particularly in West Manila. Progress in sanitation falls well short of contract sewer access targets, from less than 10% to 66% in West Manila and 55% in East Manila by 2021. Finally, why did the initial and extensive concession agreements allow for “government guarantees” for both Maynilad and Manila Water? Many poor people in Manila do not have access to water supplies because the country in which they live is illegally occupied and therefore private services are not allowed to connect them to the grid. However, innovative solutions have been found to address this problem. Maynilad, however, was not satisfied with the outcome of the first modification of the concession contract. It still refused to pay concession fees to MWSS, which needed it to repay its old debts. The amount of unpaid concession fees reached 5 billion pesos. Finally, Maynilad requested the early termination of the contract in December 2002. Despite rate increases and reduced targets, Maynilad went bankrupt in 2003. The government did not order the maynilad performance bond, but took out three new foreign currency loans worth a total of $431 million to finance the debt service of the VAT and market economy system.

The government has agreed to convert a small portion of the unpaid concession royalties, $22.67 million, into an 84% equity share of Maynilad. Most unpaid royalties should be repaid over a longer period of time. [25] In 2009, the Manila Water concession was extended until 2037 instead of 2022. [30] Maynilad`s new owners have begun to invest more. Between 2007 and September 2011, the population increased from 6.4 million to 7.8 million, the share of customers in continuous water distribution increased from 46% to 82% and non-revenue-related water increased from 67% to 47%. [31] In April 2010, the maynilad concession was also extended until 2037. [32] In June 2010, Rogelio Singson, Maynilad`s general manager, was appointed Secretary of Public Works and Highways. [33] Starting in 2011, water rates in Manila will be set by the Board of MWSS, on the recommendation of its law enforcement agency, on the basis of four mechanisms:[9] The Philippine government has not returned West Manila to the public administration and has not accepted Manila Water`s offer to take over the entire metropolitan area, but has offered to sell its share to Maynilad. In December 2006, a consortium of The Philippine construction company DM Consunji Holdings, Inc. (DMCI) and the Philippine telecommunications/real estate company Metro Pacific Investments Corporation (MPIC) bought it at a low selling price of $503.9 million. While many public tenders require high capital, this was not the case here.

In addition, the offer required only expertise in supply management – including telecommunications and energy – and not specifically for water supply management, allowing a wider variety of bidders to enter the country. [26] [27] As of 2011, Suez still held a 16% minority stake in Maynilad. [28] In January 2008, the new owners had repaid the $240 million debt to the government. [29] Residential rates are well below the average rate, which also includes business users. A housing bill for consumption of 30 cubic metres per month, including an environmental and VAT tax, 395 pesos ($10) or 13 pesos/m3 ($0.33/m3) from 2008. [56] A water bill for the same consumption in West Manila was 489 pesos/m3 ($12) or 16 pesos/m3 ($0.39/m3). However, a residential water bill for a minimum consumption of 10 cubic metres per month is only 109 pesos ($2.60), which is only $0.09/m3.