THE Philippine Competition Commission (PCC) has given the go-signal for Prime Metro Power Holdings Corp. (PMPHC) and San Lorenzo Ruiz Builders & Developers Group, Inc. (SLRBDGI) to create a company to handle the Wawa Water Project.
The country’s competition watchdog said it has approved the proposed joint venture agreement between the two firms that will form the Wawa JVCo., citing that it will not result to “substantial lessening of competition in the relevant market,” in its decision penned Dec. 19.
The PCC is tasked to review all mergers and acquisitions valued over P1 billion, to ensure the transaction does not hamper competition within the market.
In approving the transaction, the commission said there are “sufficient post-transaction competitive constraints remain from participants in raw water supply.” It added there would be no incentives for the joint venture company to “engage in anti-competitive coordinated behavior.”
With this, PMPHC and SLRBDGI will construct and establish facilities to capture water from Wawa River, located in Rodriguez, Rizal, and divert water for municipal use.
The project will provide either raw or treated water to both water distributors, Manila Water Company and Maynilad Water Services, Inc., and consumers in Metro Manila and neighboring communities.
San Lorenzo Builders will contribute its water permit, application for volume increase, and the Wawa Water project to the JV company, in exchange for 18% ownership in the latter.
The permit allows it to capture 3,480 liters per second of water from the Wawa River for municipal or commercial use. The company is also applying with the National Water Resources Board for an increase of water volume under the permit to at least 18.13 cubic meters per second (CMS) and up to 40 CMS, against the current 3.48 CMS.
On the other hand, PMPHC will have a controlling stake in the partnership with 82%. It has committed to invest in the joint venture company and raise funds for the project, once it finishes due diligence.
“PMPHC undertakes to raise project funding for the Wawa Water Project once it is convinced of the legal, commercial, and financial viability of the Wawa Water Project after it conducts due diligence within a period of a year,” the PCC quoted. — Arra B. Francia