P12-B PARTNERSHIP: MIWD, MetroPac seal joint venture

IF THE plans of MIWD and its private sector partner push through, the days of fetching water from deep wells in Iloilo City and its suburbs will be over with better distribution services. (F. A. Angelo)

AFTER two years of painstaking negotiations and preparations, Metro Iloilo Water District (MIWD) will formally seal today, Dec. 6, 2018, its joint venture agreement (JVA) with Metro Pacific Water Investments, Corp (MetroPac) for a P12.6-billion water distribution and septage project.

The 25-year JVA will allow MIWD and the Pangilinan-led MetroPac to rehabilitate and improve distribution services and provide septage services for better wastewater management.

The signing of the agreement will Thursday morning at the Jade Ballroom of Grand Xing Imperial Hotel in City Proper, Iloilo City, according to a letter to The Daily Guardian.

In a phone interview, MIWD General Manager Imelda Magsuci said the JVA has five key aims.

One is to increase MIWD’s service coverage in seven towns and Iloilo which is currently at 40,000 concessionaires, more or less.

The second aim is to meet the required water pressure of 7 pounds per square inch (PSI) at 24 hours a day, 7 days a week.

Aside from the water pressure, the JVA will also strive to meet the Philippine National Standards for Drinking Water (PNSDW).

The JVA will also strive to bring down non-revenue water (NRW) or supply lost to leaks and pilferages, which is now at more than 46 percent.

“That’s the hardest part because MIWD’s pipelines are generally old and dilapidated. It will take total rehabilitation that will cost billions to achieve this goal. The cost and massive work are also the reasons why we considered partnering with the private sector subject to government rules and procedures,” Magsuci said.

The septage component is also part of MIWD’s mandate to manage wastewater from households and commercial concessionaires.

Magsuci said they did not set any target goals for MetroPac “because their accomplishments will be considered as their key performance indicators (KPI).”

“It is up to the private sector partner on how fast and big they can achieve their goals because these will become the bases of their KPIs. If they work faster, they are assured of better revenues,” she added.

Under the JVA, the private sector partner is entitled to 80 percent of the profits that will be generated from the rehabilitation and improvement works.

“It’s 20 percent for MIWD, but our main goal here is better services more than profit,” Magsuci said.

MIWD also credited its partners who helped in the negotiation phase of the JVA.

Magsuci cited the Iloilo City government which facilitated the participation of US Agency for International Development (USAID) through its Be Secure Project.

Be Secure or Water Security for Resilient Economic Growth and Stability was a four-year activity “that seeks to promote good governance and build capacity for long-term water security, improve access to water and wastewater treatment services, and build more resilient communities.”

Its activities include increasing sustainable access to water supply and wastewater services and increasing resilience to climate-related water stress and hydrologic extremes.

“USAID, through the City Government, provided legal, technical, and financial assistance during the tedious negotiation phase. We made it a point to follow the rules to the letter in order to realize this project,” Magsuci said.

Magsuci also credited the Local Water Utilities Administration and the Office of the Government Corporate Counsel (OGCC) for facilitating the realization of the venture.

“The OGCC has reviewed and approved the JVA which was based on the rules set by the National Economic and Development Authority. There are no more legal glitches,” she added.

Aside from MIWD and MetroPac officials, Iloilo City lone district Rep. Jerry Treñas, and Iloilo Gov. Arthur Defensor Sr. were also invited to the signing.

Senator Franklin Drilon will deliver a keynote speech during the event

Iloilo City Mayor Jose Espinosa III cannot make it because of an appointment in Metro Manila.

 

‘GIVE IT TIME’

Magsuci said it would take at least six months to a year before MIWD clients can feel the benefits of the JVA because they still have to observe certain rules.

“For one, we have to form and register the JVA company with the Securities and Exchange Commission. And we also have to satisfy other requirements like local permits,” she added.

The MIWD official said the faster MetroPac can achieve its goals, the better for the consumers and the private firm as well.

“If they can achieve the KPIs at a short time, they can recoup their investments and the consumers will enjoy better services as well. The common goal really is to improve our services,” Magsuci said.

 

HITCHES   

The JVA is not without controversy after Iloilo City Mayor Jose Espinosa III questioned the project, especially its effects on the consumers.

Even before the OGCC could finish the review of the deal, Espinosa appointed a new set of MIWD directors citing a recent Supreme Court ruling, which gave the power to appoint the directors to the city mayor.

Also, the entry of other private sector players who secured or are seeking franchises from the city government caused legal disputes between MIWD and City Hall.

But Magsuci said they don’t expect any hassle from the City Hall of the joint venture corporation applies for local permits.

“The application follows certain requirements. And if we satisfy those requisites, I don’t think there would be any reason for the City government to hold or deny the permit. And we already have the Ease of Doing Business Law which mandates the issuance of permits for simple transactions within three days,” she added.

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