Title: Manila Water Concession Agreement for Water and Sanitation Services
Language: English
Type: Document
Nature: Contract Agreement
Published: January 11, 1997
Region: South Asia (SA)
Country: Philippines
Sector: Water and Sanitation
Keywords: Contractual Provisions, Contract, Water supply and sewerage system
Document Link(s):
Document Details:
Concession Agreement for Water and Sanitation Services (pdf) serving East Zone of Metro Manila - go to web site of Manila Water for more information. The Metropolitan Waterworks and Sewerage System was mandated to enter into PPP arrangements under Republic Act No. 8041 (National Water Crisis Act of 1995). It enetered into two concessions for water, wastewater and sanitation services, one for West Zone (Manila Water) and one for East Zone (Maynilad). Each concession was for 25 years with ambitious performance targets.
Tariffs were fixed until 2003 and the concessoinaires were to pay a concession fee to MWSS. Unfortunately the revenue assumptions and efficiencies to be achieved short-term were over optimistic and that, coupled with the Asian financial crisis which caused foreign exchange issues, resulted in both concessions facing financial difficulties and MWSS regulatory office agreed to tariff increases. Manila Water was then able to meet its commitments and has had its concession extended for a further 15 years.
Maynilad filed for bankruptcy in 2003 and the services were handed back to MWSS in 2005. MWSS ran the system for 2 years and then bid the concession out to a local consortium in 2007. Since then both concessions have performed well.
For more on the Manila water concession, see World Bank paper entitled The Manila Water Concession - A Key Government Official's Diary of the World's Largest Water Privatization
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