FIRST PERSON - Alex Magno (The Philippine Star) - July 21, 2020 - 12:00am

The rains have come. But the water level at Angat Dam has not risen.

The dam supplies 98% of fresh water to the Metro Manila area. Mercifully, we went through the dry months without water rationing. Hopefully, later in the year when a mild La Nina happens, the dam fills up and water pressure could be elevated to normal.

Until the Kaliwa dam project is done, some years down the road, we will be entirely reliant on what Angat Dam could supply. It is, lest we need to be reminded, a small and ancient dam badly in need of a rehab. Should it fail to deliver its usual supply, the metropolis will be uninhabitable.

Younger Filipinos might not remember the times when water was a truly scarce commodity in the capital region. Tap water, where it was available, was rationed to a few hours each day. In many communities, most of them poor, water had to be purchased by the drum at over sixty times their normal cost. The water crisis punished the poor most.

During those times, water from Angat was sufficient and the city had less than half the population it now hosts. But the distribution system was shot. About two thirds of the water that came through the pipes were either pilfered or lost to leaks. There was no way we could build a functional, not to mention competitive, economy under these conditions.

On top of all of these, the metropolitan area had no water treatment to speak off. Wastewater spilled into the waterways that drained into Manila Bay. When a storm hit, the dirty water flowed back into our homes.

The situation in the early nineties was dire and getting direr. This is why the law that enabled privatization of the water concessions. The law was aptly called the National Water Crisis Act of 1995.

By the time this law was passed, government was desperate. The MWSS did not have the money or the engineering capacity to rebuild the distribution system and reinforce the only dam supplying the urban areas responsible for over half the gross domestic product.

While the water distribution system deteriorated, urbanization was increasing rapidly. New pipes will have to be laid and new pumps installed. Leaks will have to be detected and bypassed. Pilferage will have to be stopped by installing water meters even among informal settlers.

Climate change threatened our water sources. Pollution was killing our waterways. Algal blooms and increasing organic waste was threatening Laguna de Bay, considered a supplemental fresh water source. Waste was killing our rivers and streams. Loss of forest cover caused a rise in turbidity levels, clogging our existing water treatment plants.

With rising environmental consciousness, we raised technical standards for water quality flowing through our antiquated pipes. The standards we adopted exceeded European Union standards. But compliance raised capital requirements and operating costs. The old MWSS setup simply could not manage.

A desperate government turned to the private sector for help. Only our largest corporate entities could borrow the money to rebuild our distribution system, recruit engineering talent and get an upgrade going in the shortest possible time.

The capital region and surrounding areas were subdivided into the west and east zones for water distribution. The water concessions would be distributed to two concessionaries so that they could benchmark performance against each other. The bidding was designed in such a way that the contract was awarded to the consortia (including foreign water companies that had the knowhow) that offered to charge the lowest tariffs for the water distributed. In order to make a profit, the winning bidders had no choice but improve the volume of revenue water.

In addition, the winning bidders were obligated to build a sewer system and provide wastewater treatment. Government, in all the decades it controlled water distribution, never managed to build a sewer system. Between today and the end of the water concession contracts, Maynilad and Manila Water will need to invest P465 billion to meet its service obligations.

Both the bidding design and the service obligation targets specified impressed everyone. The water privatization case in the Philippines was fully documented for other countries to copy.

The privatization of water service worked in a way I could only dream of when I carried water from the neighborhood deep well to my fourth floor apartment for my young family to use. In a few short years, water was available 24/7. The amount of water lost to leaks and pilferage dropped dramatically. Even with the reduced water pressure used to conserve the water stock at Angat Dam, I could shower in the same fourth floor apartment I live in all hours of the day.

Even if the water concessionaires triple their tariffs tomorrow, I will still be happy. That will still be very much cheaper than buying water from the water carts that plied the metro when government was running the distribution system. Efficient distribution spares us the need to store water in bins that magnified the spread of dengue in our communities.

Privatization solved the distribution problem. But that is only part of the equation.

Since government retained control over the provision of bulk water supplies, nothing happened in the over two decades since the distribution system was privatized. The concessionaires do not have enough water to sell.

Our bulk water supply is not sufficient. On hindsight, it might have worked better if government, when it privatized water distribution, should have fully privatized the provision of new water sources as well.

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