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MWCI vying for $60-M water management deal in India
Posted: 1:11 AM | Jul. 13, 2005
Christine A. Gaylican
Inquirer News Service
Published on Page B7 of the July 13, 2005 issue of the Philippine Daily Inquirer
MANILA Water Co. Inc. (MWCI), the listed water subsidiary of the Ayala Group, has been pre-qualified to bid for a $60-million water supply and sewerage services management project in New Delhi, India.
MWCI, which currently supplies drinking water to over 5 million customers in the east zone of Metro Manila, teamed up with India's largest engineering and construction firm, Larsen and Toubro Ltd., and the Mahindra Group, one of India's leading conglomerates, to vie for the project.
MWCI will compete with three other international firms in a bidding to be held in October.
The management contract requires the operator to run the water supply and sewerage systems, including meter reading, billing, collection and consumer relations; provide and put in place operational improvements that would reduce water losses, improve metering, billing and collection, and implement energy savings, as well as reliable water supply, and plan and implement a major capital investment program.
"While our resources continue to be focused on the east zone, we recognize the need to expand our business beyond it, especially to areas that will enable us to deliver maximum value to our shareholders," explained Antonino T. Aquino, president of Manila Water.
Aquino said that India's water sector presents opportunities because of its huge market potential. This would be MWCI's second venture in India. The company operates a US$200-million water and waste water facility in the province of Tiripur, also under a management contract and in partnership with the Mahindra Group and British firm United Utilities Ltd Plc.
Manila Water is deep into a major network improvement program in the east zone, which includes the development of new water sources and wastewater projects worth over P20 billion to be spent in the next five years.
Outside the east concession in Manila, the company is eyeing the potential development of water projects in other provinces, including a P2-billion bulk water supply project in Cebu.
A study was recently released saying that close to 90% of those alloted with MWC IPO have already sold this stock. Hopefully, from weak hands to strong hands. This issue has some ways to go - but not too far ahead, I think. Another 10% upside and I will be on the sell side.
manila water keeps improving their water network, pipes etc, but after digging, tambakan na lang nila yung hinukay ng buhangin, isnt it a sign of socially irresponsible company, they should be responsible too for fixing those roads that they dig right? or im getting it wrong
Last edited by rexdflex on Fri Jul 22, 2005 2:29 pm, edited 2 times in total.
You're correct bos rex. Problema kasi sa mga yan, attitude nila parang, di naman yan kasama sa trabaho ko. It's one of those intangibles that are never factored into your decision as an investor. Or at least most investors never think about that problem...
PLDT din naman ganun before when they're rolling out their cables but I totally agree with you. Utility companies like MWC, PLDT, Meralco, Globe etc.. should ensure that their contractors fix whatever damage they did on the roads and do it quick. The municipal govt where the digging will happen should impose a fine or require a bond before they be allowed to cover for the expenses of putting the road back to its original condition. Though am not sure if its already existing baka lang di nai-implement... I also think those diggings should be allowed only after rush hour at night, say 10-11pm until 5am especially on major thorough fares. Its causing heavy traffic, wasting our precious gasoline, time etc...
WATER concessionaire Manila Water Co. Inc. is seeking permission to raise its rates next month by P0.05-P0.07 per cubic meter to cover for recent peso fluctuations and servicing of old debts incurred by the Metropolitan Waterworks and Sewerage System (MWSS), a company official said.
Manila Water, a unit of the Ayala group that serves the eastern zone of Metro Manila, has submitted a petition to the MWSS Regulatory Office to increase its foreign currency differential adjustment (FCDA) rate, now P0.38, said Virgilio Rivera Jr., Manila Water group director for regulatory affairs.
The FCDA is a tariff mechanism approved by MWSS and the National Economic and Development Authority intended to ease the impact of peso fluctuations on foreign-denominated loans of the Metro Manila water concessionaires. It is a cost passed on to consumers.
Manila Water, and its counterpart in the west zone Maynilad Water Services Inc., also pays concession fees.
Rivera said the MWSS Regulatory Office was evaluating the Manila Water proposal.
The company hopes the proposal would be approved and the new rates applied in the September billing.
Rivera said Manila Water needed the tariff adjustment to settle part of the MWSS' 10-billion-yen debt to the Japan Bank for International Cooperation, which is soon to fall due.
Payment of the old debt is provided for in the concession agreement between Manila Water and the government.
"We have recommended that a confirmation of the Bureau of Treasury be engaged to determine foreign exchange gains and losses for the amortization of the JBIC loans," Rivera told the Inquirer.
Inquirer sources in the MWSS Regulatory Office said MWSS officials were discussing whether a rate adjustment was needed.
An FCDA adjustment would also apply to Maynilad even if the company has not filed a petition amid current changes in its management.
Manila Water meanwhile is in the final stage of acquiring the P1.86-billion Carmen Bulk-Water supply project in Cebu province.
The project will supply an additional 50,000 cubic meters of potable water daily to Metro Cebu, company officials said.
A memorandum of understanding signed by Manila Water and the Metro Cebu Water District (MCWD) could stand as a draft project contract, said Sherisa Nuesa, Manila Water chief financial officer.
The Metro Cebu Water District, under rules pertaining to the build-operate-transfer law, will have to subject Manila Water's bid to a competitive price challenge in the second half of the year before it can award the contract. With INQ7.net
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