Public-Private Partnership (Rivera)
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Transcript of Public-Private Partnership (Rivera)
8/6/2019 Public-Private Partnership (Rivera)
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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.
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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
The MWSS Privatization
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MWSS Chose Concession Model
The MWSS Privatization
Private Sector
Participation Option?
Service
Contract
Mgt
ContractLease
BOT
Concession
Divestiture
Privatization Objectives
Expand service coverage
Improve delivery of service
Increase operating efficiency
The MWSS Privatization
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The Regulatory Environment
The Concession Framework
The Regulatory Environment
Before Aug. 1, 1997 Since Aug. 1, 1997
MWSSCharter
MWSSCharter
PUBLIC PUBLIC
ConcessionAgreement
Reimbursement
Cost + ADR
Service
Obligations
MWSS MWSS
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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)
The Regulatory Environment
Service Obligations
Water SupplySewerage
andSanitation
CustomerService
The Regulatory Environment
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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 Regulatory Environment
Profile of Manila Water Company
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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
Profile of Manila Water Company
Manila Water Stockholders
Profile of Manila Water Company
EmployeesEmployees
31.0%
BPI CapitalBPI Capital 6.2%
7.4%
7.9%
4.2%
12.0%
PUBLIC 31.3%
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The Seven Business Areas
Territory
Management
Approach
BalaraBalara
MarikinaMarikina
CubaoCubao
San Juan/
Mandaluyong
San Juan/
Mandaluyong
Rizal/
Pasig Makati Makati
Taguig/
Pateros
Profile of Manila Water Company
Company Performance
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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
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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
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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
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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
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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
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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
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Sustainable Development Initiatives
Sustainable Development Framework
Sustainable Development
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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
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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
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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
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Future Expansion- within concession
area- beyond concession
area (regional)
SustainableDevelopment
- sustained social andenvironmental
programs
Summary
SUCCESSFUL PUBLIC-PRIVATE PARTNERSHIPSUCCESSFUL PUBLIC-PRIVATE PARTNERSHIP
Summary
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Thank YouManila Water Company, Inc.
MWSS Admin. Bldg., Katipunan Road
Balara, Quezon City
Website: http://www.manilawater.com