Manila Water to fall short of P10-billion capex target this year

MANILA, Philippines - Ayala-run Manila Water Co. Inc. (MWCI) will likely fall short of its P10-billion target spending this year, a company official said.

In an interview, MWCI treasurer and chief finance officer Luis Juan Oreta said for the first nine months of 2012, they have only spent P4.8 billion out of the programmed P10 billion.

Oreta did not provide an explanation for the possible missed capex target but industry sources said the company has been encountering “implementation” problems.

According to Oreta, this was a disappointment on MWCI’s part as they had a P9-billion capex in 2011. For 2008-2012, MWCI had programmed to spend P40 billion.

For the regulatory period 2013-2017, it intends to pour in P60 billion in capex for network expansion, waste water treatment, and development of new water sources.

Oreta noted that there have been a number of areas within its franchise, particularly in Rizal province, which have not been linked to the system.

He said there is also a need to develop new water sources. At present, MWCI is dependent on one source – Angat Dam.

The MWCI official said based on their proposal to the Manila Water Works and Sewerage System (MWSS) board early this year, they would be setting up another water source within the next five years.

The P2.5-billion Laguna Lake project, he said, had already been approved, including the engineering studies.

“We will be breaking ground within six months,” he said.

He said there is a need to continuously invest on water source projects to meet their one to two percent growth in demand each year

Based on the company’s long-term plan, he said they may be spending around $1.5 billion to build 25 big waste water treatment facilities all over its franchise area before its concession contract ends in 2037.

MWCI is supplying water in the East Zone of Metro Manila and surrounding provinces. This zone covers Manila (San Andres and Sta. Ana only), Quezon City (east of San Juan River, West Avenue, EDSA, Congressional and Mindanao Ave., Tandang Sora, Pasong Tamo and Matandang Balara), Makati City (east of South Super Highway), Mandaluyong City, San Juan, Marikina City, Pasig City, Pateros, Taguig and Rizal province.