French firm to invest P15 B in water projects

French utilities firm Vivendi Water Co. is investing P15 billion for its water development project in Bulacan and Cebu, a joint undertaking with its local partner, shipping giant Aboitiz Equity Ventures Inc.

Documents obtained from the Board of Investments (BOI) revealed that Aboitiz and Vivendi are planning a P6-billion water development project in Bulacan and a similar project in Cebu worth P9 billion.

The Bulacan project will be developed under the government's build-operate-transfer (BOT) scheme under which the Vivendi/Aboitiz joint venture firm will develop and operate the water distribution facility for 25 years before turning it over to the Philippine government.

Instead of bidding out the Bulacan water development and distribution contract, the BOI said the project would be subject to a Swiss challenge where the Vivendi/Aboitiz group would submit an unsolicited project proposal.

Once the proposal is accepted, the project would be opened to other interested parties that may be interested in submitting proposals and matching the offer made by the original proponent who will have the right of first refusal.

The Cebu Water District project, on the other hand, is still being packaged by the Vivendi/Aboitiz group and the BOI said the proposal is still undergoing revisions before being submitted formally.

The BOI said the Cebu project would involve the rehabilitation and expansion of the water distribution system in Metro Cebu before turning the facility over to the state-owned Metro Cebu Water District.

Unlike the water supply in Metro Manila and most of Luzon, Cebu's water supply has to go through an extra degree of desalination due to seepage from industrial development sites and population pressures.

Both projects have applied for BOI incentives. If approved, they would qualify for various perks, including tax breaks and tax credits on locally purchased capital equipment.

The Vivendi Utilities Group is one of the largest water, waste management and telecommunications conglomerates in the world with operations in the US through Generale des Eaux which manages heating networks, collects, recovers and recycles waste and operates transport networks through CGEA Transport Inc.

Water is Videndi's core business and the company has a track record extending back 150 years.