Maynilad Mwss Concession Agreement

In June 1994, the British company Biwater and a Malaysian company approached Ramos with an unsolicited offer to purchase the MWSS. The Government objected because the law did not allow for the sale of MET; it was open to the idea of a public-private partnership, such as. B of a concession contract, under which the government would retain ownership of the assets. The Philippine government wanted to choose the private partner on a competitive basis. [13]:9-11 Among the companies interested were the two largest French international water companies, Conpagnie Générale des Eaux and Lyonnaise des Eaux. The French Embassy and Lyonnaise des Eaux told the government of what they saw as a successful privatization of water in Buenos Aires, where Lyon had obtained a concession in 1993 and where tenders had initially reduced water tariffs below their previous level under public administration. The Lyonnaise brought government officials to Macau, where he had reduced water losses. Officials also visited France and England. [13]:12-15 In December 2019, the MWSS Board of Directors revoked its earlier decision to extend the Manila Water concession contract from 2022 to 2037.

The MET Secretariat then issued a press release stating that the decision did not result in the cancellation or total termination of the contract. The MWSS Regulatory Office also issued a statement clarifying that the extension of the concession contract had not yet been cancelled. In West Manila, after Maynilad changed ownership in 2007, the company increased its investments. One of the results is that the proportion of customers receiving a 24-hour water supply increased from 32% in 2007 to 71% in early 2011. [41] The proportion of customers receiving water with a pressure of more than £7 per square inch, less than half the pressure required by the concession contract, increased from 53% in 2007 to 95% in September 2011 [31]. In late 2019, the Philippine president made public statements questioning the 1997 MWSS concession agreement, arguing that there were incriminating provisions detrimental to the government and people, and said he intended to impose a new agreement with the concessionaires. This also led the MWSS Board of Directors to dissolve its 2009 decision to extend the concession contract by fifteen years. Under a concession contract, private companies collect and own revenue from water tariffs. In return, for operating costs, investments and, in the case of Manila, they must pay a concession fee to the Philippine government to pay the old debts and relatively modest costs of operating a regulatory office. [Citation required] Private companies can obtain a return on total capital through their respective financial offers, which is referred to in their contract as “weighted average cost of capital” or “reasonable market-based discount rate”.

Manila Water`s yield was only 5.2 percent. On that basis, it submitted a very low tariff which enabled it to obtain the concession. In 2001, Manila Water managed to increase its yield to 9.3 per cent after international arbitration. From the beginning, Maynilad`s offer had a more realistic return of 10.4 percent. [8] Return on equity was higher than total return on capital. In the case of Manila Water, the return on equity from the fourth year of operation was 18-20 percent. [7] Manila Water, on the other hand, has not invested in the development of the system in its eastern zone. [23] It focused on reducing water without revenue and initially recorded only small amounts in local currency.

She offered competitive work and earned the trust of former MWSS employees trained in relevant fields. Few high-level positions have been filled by marginals seconded by parent company Ayala or its foreign partners. .