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Apo Agua Infrastructura to deliver bulk water supply to Davao by 2021

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DAVAO CITY — A more stable and bigger volume of water supply is expected to be delivered to the city within the first half of 2021, upon completion of the P12.6-billion bulk supply project of the Aboitiz-led Apo Agua Infrastructura, Inc.

The project will tap the Tamugan River as source and deliver 300 million liters (MLD) per day to the Davao City Water District (DCWD).

DCWD Spokesperson Bernardo D. Delima, Jr. said the completion of the project will allow the water utility to improve service to areas that currently have fluctuating supply as well as expand alongside the city’s growth.

“We will be able to service all those (urban areas) 100%,” Mr. Delima said during the press conference at yesterday’s groundbreaking ceremony at the project site in Tamugan.

Submitted as an unsolicited proposal in 2013, the project was awarded to AAII after a Swiss challenge in 2014.

Apo Agua is 70%-owned by Aboitiz Equity Ventures Inc. and the remaining 30% under JV Angeles Construction Corp. (JVACC).“As a long standing partner of Davao City for over 70 years, we at Aboitiz are excited to be working with JVACC in order to provide current and future generations of Davaoeños with a sustainable, safe, and dependable source of bulk water supply,” Roman V. Azanza III, Apo Agua president, said.

The water supply project was originally targeted for completion by 2019, but permits and other documentary requirements from government agencies faced delays.

Apo Agua General Manager Cirilo C. Almario said the projected capital expense, originally set at P10 billion, has gone up to P12.6 billion due to the delays.

Under the contract with DCWD, the company is not allowed to sell water to any other buyer, and it will pay a six percent penalty if it fails to deliver the committed volume.

Mr. Delima said DCWD will buy water from Apo Agua at P12.25 per cubic meter (cu.m.), excluding value added tax, in the first year, which is lower than the utility’s current production cost of about P18/cu.m.

“Although there will be an increase in the years to come, but not on the first year,” he said.

He also noted that rates for consumers will not be lowered as DCWD is embarking on network expansion.

At present, the water district has about 61% of the city’s more than one million population covered.

In 2019, DCWD expects demand at 245 MLD while current supply, sourced from groundwater wells, is only about 238 MLD.

Once the bulk water supply facility starts operations, DCWD will be able to rest its wells for at least 25 years.

The agreement also provides that should Apo Agua default on its obligations, DCWD will take over the bulk water supply facilities. — Carmelito Q. Francisco