Manila Water Company Concession Agreement

The company believes that the current concession contract has achieved the objectives of the water-PPP framework over the past twenty-two years. True to the continuous realization of the “mission of not running a business”, despite all the challenges that arise, the company will always have above all the desire to offer its customers an authentic and exceptional service. In early 1997, proposals for the Eastern and Western concessions to Metro Manila were submitted by four private bidders, all of which were joint ventures between an international water manager and a local company. Manila Water won the public tender for the 25-year mwSS concession in metro Manila`s east zone, while Maynilad Water Services won the contract for the western zone. The operation of water suppliers began in August 1997. The concession contract between two equal parties, Metropolitan Waterworks and Sewerage System (MWSS) and Manila Water, provides the structure and framework within which a private government partner was able to clean up and develop the water and wastewater supply in the eastern area of Metro Manila. Manila Water and Maynilad also chose to waive their tariff adjustments for 2020, amid hearings with the House of Representatives on the same allegedly incriminating provisions in their 1997 concession contract with the government. – Revin Mikhael D. Ochave The concession contract is a performance-based framework, in which the concessionaire is responsible for meeting service obligations and performance standards as part of a service improvement plan discussed and approved by the MWSS Regulatory Office, an office created by the concession contract, which is supposed to represent the interests of the client. The dealer`s performance in terms of the number of these standards is checked every five years throughout the concession period, within the framework of a so-called rebasing exercise rate. Past results are reviewed by the MWSS and future service improvement and extension plans will be submitted for review and approval. Once the service improvement plan is completed, the calculation of the tariff adjustment is carried out, granting a “reimbursement model” to fully recover capital and operating expenses for the remaining duration of the concession at a yield that has been offset by industrial and market agreements and duly approved by the MWSS.

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