Public-Private Partnership (Rivera)

8/6/2019 Public-Private Partnership (Rivera)

http://slidepdf.com/reader/full/public-private-partnership-rivera 1/20

The Manila Water Company, Inc.

VIRGILIO C. RIVERA, JR.

Group Director

Regulation and Corporate Development

The views expressed in this paper are the views of the authors and do not necessarily reflect the views or policies of the

Asian Development Bank (ADB), or its Board of Directors, or the governments they represent. ADB does not guarantee

the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use.

Terminology used may not necessarily be consistent with ADB official terms.

OUTLINE

Background on MWSS Privatization

Regulatory Environment

Profile of Manila Water Company

Company Performance

Sustainable Development Initiatives

Summary

The Manila Water Company, Inc.



The MWSS Privatization

MWSS vs Asian Utilities

4.63882247.3Bangkok

1.436100241.4K. Lumpur

2.3351002410.6Seoul

2.836100246.3HongKong

2.07100243.0Singapore

9.86358.71610.6Manila

Staff/1000Connections

Non-Revenue

Water(% of prodn)

WaterCoverage

(% of pop)

WaterAvailability

(hrs/day)

Population(million)

City

Source : ADB 1996 Data




MWSS Chose Concession Model


Private Sector

Participation Option?

Service

Contract

Mgt

ContractLease

BOT

Concession

Divestiture

Privatization Objectives

Expand service coverage

Improve delivery of service

Increase operating efficiency




The Regulatory Environment

The Concession Framework


Before Aug. 1, 1997 Since Aug. 1, 1997

MWSSCharter

MWSSCharter

PUBLIC PUBLIC

ConcessionAgreement

Reimbursement

Cost + ADR

Service

Obligations

MWSS MWSS



The Regulatory Structure

Department of Environment &

Natural Resources

(DENR)

PollutionControl

Standards

Drinking Water

Quality

REGULATORY

OFFICE

Prices,Service Standards

Metropolitan Waterworks & Sewerage System (MWSS)

Board of Trustees

Concessionaires

Department of Health (DOH)


Service Obligations

Water SupplySewerage

andSanitation

CustomerService




Rates Adjustment Mechanism

BasicTariff

Consumer Price Index(annual)

Extraordinary Price Adjustment(“unforeseen events”)

Rate Rebasing Adjustment(five-year cycle)

25-year concession period

Foreign Currency Differential Adjustment(quarterly, FX changes)





The Concession Area

The East Zone covers 23

cities and municipalities

Covers all new businesscenters in Metro Manilaand is focal point ofpopulation growth

Spans approximately1,400 square kilometers

Population of

approximately 5.3million

EAST ZONE


Manila Water Stockholders


EmployeesEmployees

31.0%

BPI CapitalBPI Capital 6.2%

7.4%

7.9%

4.2%

12.0%

PUBLIC 31.3%



The Seven Business Areas

Territory

Management

Approach

BalaraBalara

MarikinaMarikina

CubaoCubao

San Juan/

Mandaluyong

San Juan/

Mandaluyong

Rizal/

Pasig Makati Makati

Taguig/

Pateros


Company Performance



1997

26% 91%26% 91%

Q1 2004

24 hours 13-23 hours 0-12 hours24 hours 13-23 hours 0-12 hours

Improved 24-hour access todrinking water

Company Performance

in kilometers

0 0 5.4

174

793

897

29.6

235

424

0

100

200

300

400

500

600

700

800

900

1,000

1997 1998 1999 2000 2001 2002 2003 2004 Mar.

2005

Expanded and rehabilitatedmore than 800 km of pipelines

Company Performance



in % Non-Revenue Water (NRW)

63.0%

40.7%

43.4%

50.7%

54.0%

52.0%51.0%

53.0%

55.2%

40 %

45 %

50 %

55 %

60 %

65 %

1997 1998 1999 2000 2001 2002 2003 2004 Mar.

2005

Continuous reduction of waterlosses

Company Performance

594

645

706

758 751767

840

440

825

400

500

600

700

800

900

1997 1998 1999 2000 2001 2002 2003 2004 Mar.

2005

in Million Liters per Day

Steady growth in billed volume

Company Performance



340

390

409

428

471

515

570556

325

300

350

400

450

500

550

600

1997 1998 1999 2000 2001 2002 2003 2004 Mar.

2005

number of Households in Thousands

Significant expansion ofcustomer base

Company Performance

Improved sewerage servicesthru low-cost sewage treatmentplants

Construction of PackageSewage Treatment Plant

24 out of 27 projectscompleted

Beneficiaries: 29,574 households

MAKATI

QUEZONCITY

TAGUIG

RIZAL

TOWNS

MANDALUYONG

PASIG

MAKATI

QUEZONCITY

TAGUIG

RIZAL

TOWNS

MANDALUYONG

PASIG

Company Performance



319 601 952

2,320

7,235

18,365

36,039

50

41,195

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

1997 1998 1999 2000 2001 2002 2003 2004 Mar.

2005

Number of Septic Tanks Desludged (cumulative)

Provided sanitation servicesthru septic tanks desludging

Company Performance

Greater funding flexibility

One of the most widely-placed stock offerings

13,629 new shareholders

First IPO sold internationally since 1997

15x oversubscribed in the international offering

First water company to be listed at PSE

Manila Water IPO

Company Performance



6.50

4.75

2.71

1.411.321.181.111.091.00

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

1997 1998 1999 2000 2001 2002 2003 2004 2005 IPO

0

2

4

6

8

Market Capitalization Value

In PhP/ share In PhP Billions

PhP

15B

PhP

9B

PhP

5B

PhP

2B

PhP

2.6B

IFC Investment

IPO

More than six-fold increase in FMV by listing date

19% CAGR, in US$ terms

Growth in market value

Company Performance

Solid financial performance

Revenues

OPEX

EBITDA

In Million Pesos

-500

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

1997 1998 1999 2000 2001 2002 2003 2004

Net Income

% CAGR (00-04)

Revenues 32%

EBITDA 73%

Net income 82%

Company Performance



Support from Creditors

25

55

67.2

87.2

117

147

0

50

100

150

1999 2000 2001 2002 2003 2004

In Million US Dollars (Cumulative Amount)

LOCALBANKS

Company Performance

East Zone

Volume growth within East Zone:

♦ Coverage of expansion areas

♦ Population growth

♦ Increase water volume per

capita

♦ Wastewater

Tariff growth within East Zone:

♦ Progressive tariff regime

♦ Increasing contribution

from wastewater

New growth initiativesoutside the East Zone:

♦ Philippines

♦ Asian region

East Zone to remain the key focus

Growth Strategy

Company Performance



Sustainable Development Initiatives

Sustainable Development Framework

Sustainable Development



1.5

13.6

27.6

50.5

63.9

101

123.3

131.4

0

20

40

60

80

100

120

140

1998 1999 2000 2001 2002 2003 2004 Mar.

2005

800 K800 K

Number of HOUSEHOLDS in thousands

Equivalent

POPULATION

“Tubig Para Sa Barangay”

Sustainable Development

SUMMARY



Manpower Development

- Quality service

from employees

CorporateTransformation

- Trust and confidence informer public employees

Summary

Customer Service

- Territory Management

Approach

Regulatory Environment

- Effective Regulatory

Relations

Summary



25

117

147

87.2

67.2

55

0

50

100

150

1999 2000 2001 2002 2003 2004

Local

Banks

Environmental andSocial Responsibility

Solid BankingRelationship

Summary

Ayala Corporation

45.8%

Employees

6.5%

Mitsubishi

10.2%

United Utilities

17.8%

IFC

9.6%

BPI

10.2%

0

10

20

30

40

50

60

70

1997 1998 1999 20 00 2001 2002 2003 2004

Revenues

Operating

Expenses

EBITDA

Solid Stockholder Base

Solid FinancialPerformance

Summary



Future Expansion- within concession

area- beyond concession

area (regional)

SustainableDevelopment

- sustained social andenvironmental

programs

Summary

SUCCESSFUL PUBLIC-PRIVATE PARTNERSHIPSUCCESSFUL PUBLIC-PRIVATE PARTNERSHIP

Summary



Thank YouManila Water Company, Inc.

MWSS Admin. Bldg., Katipunan Road

Balara, Quezon City

Website: http://www.manilawater.com

Public-Private Partnership (Rivera)

Documents