Maynilad infrastructure spending to reach P163 billion in 5 years

MANILA, Philippines — West Zone concessionaire Maynilad Water Services Inc. (Maynilad) has set a P163-billion spending for infrastructure projects from 2023 to 2027.

These projects aim to sustain service improvements in the face of challenges such as climate change and population growth, the company said.

Maynilad allocated 61 percent of the total amount, or P101 billion, for water projects while the balance will be for wastewater projects.

The five-year service improvement plan seeks to enhance water security, environmental sustainability, service expansion and disaster resiliency.

“Bulk of the investment will go toward developing more water sources, building more pumping stations and reservoirs, and replacing old pipelines so we can deliver more water supply in response to the growing demand,” Maynilad CFO Randolph Estrellado said.

The company official said these projects are important because some customers in the West Zone have yet to be provided with 24-hour water service.

“Areas in the farthest points of our distribution network, which still have limited supply availability, stand to benefit the most once we complete the construction of additional water treatment plants,” he said.

Meanwhile, wastewater projects continue to be a priority, with plans “to build six more in the next five years so we can sustain sewer coverage expansion,” Estrellado said.

Since 2007, Maynilad has already built 20 wastewater facilities.

For the next rebasing period starting 2023, Maynilad earlier proposed an average tariff increase of P13.31 per cubic meter (cu.m), which will be implemented in tranches over the next five years.

The company agreed with the MWSS Regulatory Office that the first tranche, amounting to P3.29 per cu.m., will only cover for inflation adjustments, with succeeding tranches contingent on actual service improvements.

“We think it’s fair that we first deliver on that commitment before the succeeding increases are implemented,” Estrellado said.

“But for 2023, we need to at least be allowed an inflationary adjustment because the cost for running our facilities, particularly the input costs of producing water, has already doubled, and we have not implemented any rate adjustment for the past four years,” he said.

The MWSS RO conducts a rate rebasing exercise every five years pursuant to the concession agreement entered into by the MWSS with the water concessionaires.

Rate rebasing is a periodic performance review and general tariff adjustment, which sets the maximum rates that the concessionaires may charge for their services.

With the said process, water rates will be adjusted depending on the performance, expenses, earnings, unrecovered investments and service improvement plans of the water concessionaires.

East zone concessionaire Manila Water Company Inc., which is also undergoing rate rebasing, is spending P181 billion for its capital investment program during  the same five-year period.

Broken down, P105 billion is for capital expenditure (capex) and P76 billion for operating expenditure (opex).

It  also proposed an average increase of P19.25 per cubic meter from 2023 to 2027.

Manila Water serves the East Zone, which encompasses parts of Makati, Mandaluyong, Pasig, Pateros, San Juan, Taguig, Marikina, most parts of Quezon City, portions of Manila, as well as several towns in Rizal.

On the other hand, Maynilad services the west zone of Metro Manila covering parts of Manila, Quezon City, Makati, Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas and Malabon, cities of Cavite like Bacoor and Imus and towns of Kawit, Noveleta and Rosario.