Bidding for $1B water project readied

A massive $1-billion water supply project for Metro Manila could be auctioned off to the private sector by August or September this year, according to an official of regulator Metropolitan Waterworks and Sewerage System (MWSS).

MWSS Administrator Gerardo Esquivel told the Inquirer that the New Centennial Water Supply Source project was expected to be awarded in 2014, the same time that the estimated five-year construction period would start. This will be the first public-private partnership (PPP) deal to be bid out by the MWSS.

“The feasibility study should be done by end-June,” Esquivel said in an interview. He said this would be followed by the approval by the National Economic and Development Authority (Neda), which he expected after 45 days.

Esquivel added that while the bidding was targeted this year, the actual process could stretch through next year “to give bidders substantial time to digest” the PPP deal.

The New Centennial Water project is part of long-running efforts by the government to find and develop a secondary water source to the Angat Dam in Bulacan, whcih supplies 97 percent of Metro Manila’s needs.

Esquivel said the assumed project value was pegged at $1 billion, although he noted that the final numbers would be validated within three weeks.

The New Centennial Water project is expected to supply an additional 1,800 million liters a day (MLD) and add to Angat’s existing 4,000 MLD capacity. The water project will involve the development of dams at the Kaliwa river basin in Rizal province.

Esquivel said the Laiban dam would be part of the new system. The Laiban dam drew controversy due to the unsolicited proposal of conglomerate San Miguel Corp., which reportedly contained certain take-or-pay guarantees that Metro Manila’s water concessionaires claimed would increase rates. The project was shelved in 2010 due to the dispute.

Apart from the development of dams, the New Centennial Water project will also involve the construction of a water treatment facility and a hydroelectric power plant, according to information posted on the website of the PPP Center.

The government has been ramping up the rollout of new PPP projects, most of which are related to transport infrastructure. Total infrastructure spending, a driver of economic growth, could account for 5 percent of gross domestic project, or P698 billion, by 2016 from 2.6 percent last year, Neda announced in February.

The PPP program is a flagship initiative of the Aquino administration. However, various delays since it was launched in 2010 means only three PPPs have so far been awarded to the private sector. These are the four-kilometer Daang Hari-South Luzon Expressway Link, the school infrastructure (Phase 1) project and the Ninoy Aquino International Airport Expressway project.