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MWC to take P60-M hit from Boracay closure

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Manila Water Philippine Ventures, Inc.'s newly-bagged 25-year franchise in San Fabian, Pangasinan is set to be operational by 2019.

By Victor V. Saulon, Sub-Editor

MANILA WATER Co., Inc. (MWC) expects to take a hit of around P60 million to P70 million when Boracay is closed to visitors for six months starting on April 26, but the Ayala-led firm is looking at opportunities in the island, including a waste-to-energy project.

Ferdinand M. dela Cruz, MWC president and chief executive officer, said the company derives around P142 million annually from its operations in Boracay. The bulk or 70% of Boracay’s water consumption comes from tourists, and the rest from residents.

“So if you project six months and then take a hit there, it could be a range… It could be anywhere from half that if it is all zero or a little higher, so about half to about 60%. So that would be the range of hit,” he said in a press conference after the company’s annual stockholders meeting on Monday.

“So you’re looking at about P60-70 million, which we have to cover from other businesses. By and large, it’s something that’s not very very big for the enterprise to take a hit,” Mr. Dela Cruz added.

Boracay Island Water Co., Inc. is a joint venture between Manila Water and the government’s Tourism Infrastructure and Enterprise Zone Authority (TIEZA). Boracay Water holds a 25-year concession to serve potable water and operate the sewerage system.

In 2017, Boracay Water recorded a billed volume of 5.5 million cubic meters (mcm), up 13% from 4.9 mcm in 2016. This compares with the 488.4 mcm for Manila Water’s concession in Metro Manila, which grew by 2% from 478.9 mcm in 2016.

Mr. Dela Cruz said Manila Water has a pipeline of projects whether with local government units (LGUs) or business-to-business potential partners, which span across the Philippines and the Association of Southeast Asian Nations (ASEAN).

“These are business development timelines, so we’ll see which ones will develop,” he said, adding that one of the projects that the company is looking at is waste-to-energy.

Geodino V. Carpio, MWC chief operating officer, said the company’s innovations unit Manila Water Total Solutions Corp. has team that is working full time to look for opportunities in the “nexus of wastewater, solid waste and energy.”

“For Boracay, we can do as much as 1 megawatt (MW),” he said. “Sludge contains a lot of capability to release gases which are combustible and could be harnessed to generate energy. That same process of harnessing energy from sludge could also be used for organic solid waste.”

BORACAY PROJECT
Mr. Carpio said MWC had been awarded the first proponent status in Boracay for a proposal to develop a waste-to-energy facility.

“We are awaiting approval from the board of the Boracay LGU and find out what happens after that,” he said. “If we get approval then it goes to the PPP (public-private partnership) process of challenging, and hopefully after the challenging we get the project and we can start the project within the year. So it’s all up to the Boracay LGU at this point.”

During the press conference, Mr. Carpio also addressed claims by Maynilad Water Services, Inc. that despite their discussions along with state agency Metropolitan Waterworks and Sewerage System last Friday, the amount of raw water that was entering Maynilad’s La Mesa treatment plants was still less than what it was entitled to receive.

“We’ve been very quiet about this issue because we were exercising a lot of corporate decency and sobriety about it,” he said.

Mr. Carpio explained there is a common purpose facility (CPF) comprised of managers from both Maynilad and Manila Water that coordinates a 60-40 split of the raw water allocation in favor of Maynilad.

“The splitting process is not an exact thing. It’s like steering a boat, you can oversteer or understeer. So at any point, Maynilad may be getting more or getting less. We only speak of averages throughout the day,” he said.

He said historically for the past 20 years, Maynilad had been getting on average more than 60% of its share. Thus, he said Manila Water was surprised when the other company announced water interruptions spanning from Valenzuela City up north down to Cavite City.

“On average from March 25 to April 10, we got 41.54% and they got 58.46%,” he said, calling it a variance that should not be enough to cause the widespread water interruption.

He said the two companies continue to hold discussions on the issue.