AEV investing P12B in Davao water project

Conglomerate Aboitiz Equity Ventures Inc. expects to invest some P12 billion in a new bulk water project in Davao City, aiming to break ground in July and complete the much-needed water infrastructure within three years.

AEV chief finance officer Manuel Lozano said the “Apo Agua” project, a partnership with the Davao City Water District (DCWD), would provide 300 to 350 million liters of potable water per day using Tabugan River as water source.

The project—touted as the largest private bulk water deal in the country—was a result of an unsolicited proposal submitted by the AEV group. It was awarded to the group after a price challenge.

“Our goal is to give water by the end of 2019,” Lozano said.

“Davao really needs water. Only 63 percent of franchise areas have access to water, so they are always looking for new sources of water,” Lozano said, adding that deep wells were the only source of water of some households.

Apo Agua Infrastructura Inc., a 70-30 percent joint venture between AEV and J.V. Angeles Construction Corp. (JVACC), signed the bulk water supply agreement with the DCWD in 2015. JVACC would be the engineering, procurement and construction contractor.

It had taken time for the project to break ground because of the tedious preparations, such as getting the right-of-way clearance and other permits, Lozano said.

The group expects to build at least 30 to 52 kilometers of pipes to bring the water from the river to the water treatment plant, he noted.

The agreement also involves the construction of a fully renewable energy-powered water treatment plant.

“It’s not that hard to build but it needs coordination with DPWH (Department of Public Works and Highways), until it gets to the water treatment plant,” Lozano said.

But now, Lozano said all of the agreements had been signed and the project financing obtained. “We’re just finalizing a couple some permits and it’s ready to go,” he said.

The project will take at least 2.5 to three years to be completed.

Submitting an unsolicited project proposal, Lozano said, was definitely the fastest way to build infrastructure

“We like rail, airports, water. Water is a bit challenging because you have to find a source,” Lozano said.

On airports, Lozano said AEV was still keen on bidding for the unbundled five airport projects and now searching for a foreign partner who would be willing to take on a smaller project.

In 2015, AEV teamed up with France-based airport infrastructure provider Vinci Airports to bid for five regional airports offered under the government’s public-private partnership (PPP) framework. But now that the government is bidding each airport separately, Lozano said the economics of the project changed and the previous foreign partner had backed out.—DORIS DUMLAO-ABADILLA