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Water execs told: ‘Shape up or ship out’

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WATER SERVICE disruption since earlier this month in Metro Manila’s east concession zone prompted President Rodrigo R. Duterte to summon both regulatory and corporate officials overseeing the current situation to Malacañan Palace on Tuesday night where he told regulators to “shape up or ship out” and threatened termination of concessionaires’ contracts, according to statements of the Palace and parties present in the meeting.

A statement released by Presidential Spokesperson Salvador S. Panelo on Wednesday said an “obviously outraged” Mr. Duterte met with officials of the Metropolitan Waterworks and Sewerage System (MWSS); Manila Water Company, Inc. that covers Metro Manila’s east zone; and of Maynilad Water Services, Inc. that takes care of the capital’s west zone.

In his remarks during the Water Philippines conference in Pasay City, Mr. Panelo told participants that Mr. Duterte engaged the officials in a 40-minute “monologue.”

“I will fire officials and I will terminate the contracts of the concessionaires and I will not listen to your explanation because this explanation can only be plain excuses,” Mr. Panelo recalled Mr. Duterte as saying, telling regulators to “shape up or ship out.”

The meeting “ended abruptly” with Mr. Duterte telling the concerned parties to submit a report on or before April 7, he added.

“He (Mr. Duterte) said he could not understand why there could be a water crisis. He was so outraged.”




In separate statements on Wednesday, Maynilad said it will submit a report to the Office of the President explaining its long-term plan to meet future water demand, while Manila Water said it is ready with contingency measures to solve faster the water shortage hitting parts of Metro Manila.

Metro Pacific Investments Corp., which has majority stake in Maynilad, is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls.

In a press briefing in Malacañang on Wednesday, MWSS Administrator Reynaldo V. Velasco said the President did not allow regulators to speak, engaging instead in a 40-minute “homily”.

“The President did not want to listen to any presentation. He was just expressing his frustration, saying that El Niño was a certainty, it has been recurring but not much preparation was made,” Ramoncito S. Fernandez, Maynilad president and chief executive officer, told reporters at the sidelines of the Water Philippines conference.

Manila Water started imposing daily service interruptions in its area more than a week ago, as a confluence of heightened demand and reduced level at its La Mesa Dam reservoir made taps in many areas run dry for weeks. Regulators have said that the concessionaire’s failure to put a new water treatment plant into operation by end-2018, as scheduled, was largely to blame for the problem. The situation has lately improved somewhat after Manila Water was allowed to tap 101 deep wells to provide an additional 101 million liters a day (MLD) for a limited period and has been offered up to 50 MLD assistance by Maynilad as well. San Miguel Corp. has also offered delivery of 140 MLD from its Bulacan Bulk Water Supply plant via trucks to affected communities.

In a March 18 press release, Mr. Velasco noted that “concession agreements give Manila Water an allocation of 1,600 MLD for its 6 million consumers and Maynilad with 2,400 MLD for its 9 million consumers”.

“Manila Water is getting its allocation of 1,600 MLD but its requirement is now pegged at 1,750 MLD due to increase in demand in consumption and population growth. The present problem could have been averted had Manila Water’s 100 MLD Cardona Treatment Plant been operational since October 2018.”

At the House of Representatives, Ferdinand M. Dela Cruz, Manila Water president and chief executive officer, discussed the company’s contingency plans, including ones that will bring back water supply in the capital’s east zone to normal level. “We are working on an overperformance target so that we could advance the supply deficit resolution much, much earlier,” he said in his opening statement at the House.

In the same hearing, Mr. Fernandez said Maynilad was not part of the problem and has even offered solutions.

“Maynilad west zone has no shortage today. We are happy to share that to our constituents and we have offered support by way of, one, we have given 10 MLD (million liters per day) already [to Manila Water] at the La Mesa portal that came from the savings of water that we generated because we used our backwash,” he said, referring to the water being used to clean the filters that was recovered and reused.

“The second help that we have offered is that we have lent up to 11 water tankers to Manila Water for their use.”

Mr. Fernandez said the third support that Maynilad had given, which was only agreed last night between the companies and MWSS, was to install stationary water tanks to put an end to the long lines of consumers waiting for water refill in remote areas that cannot be reached by the water pressure.

“So nag-offer kami ng stationary water tanks, five of our tanks. We have offered it to Manila Water this morning para ma-deploy nila sa mga — I think there are still 11 barangays na kulang pa rin ng tubig para refill na lang nang refill ‘yung fire trucks ‘tsaka water tankers doon,” he said.

(We offered stationary water tanks, five of our tanks. We have offered them to Manila Water this morning for deployment — I think there are still 11 barangays with deficient water supply so these can be refilled continuously by fire trucks and water tankers.)

Maynilad’s offer is apart from the previously agreed cross-border water flow. The first of five water-sharing flows from its network to Manila Water’s started on Friday along West Ave., delivering 2 MLD, he said.

Mr. Fernandez said the company could hasten the flow to reach up to 50 MLD earlier than May if its second Putatan water treatment plant is activated, which it is targeting in the first week of April.

“I don’t think Maynilad is alluded to, we don’t have a problem,” he said about the threat of losing its concession contract. But he said the company is prepared to respond to Malacañang and “rehash” its existing medium-term and long-term plans.

The plan is to lessen Maynilad’s dependence on Angat dam, which supplies about 96% of Metro Manila’s water requirement.

The concessionaires source 4,000 MLD from Angat dam, with Maynilad receiving 2,400 MLD for distribution to its 9.5 million customers, while Manila Water gets 1,600 MLD for its 6.8 million customers.

“We were the first one to go to Laguna Lake. As early as 2009 we went and proceeded to build our first plant,” Mr. Fernandez said.

A third water treatment plant with a capacity of 100-150 MLD is already in the pipeline, he added.

Mr. Fernandez said the third plant’s capacity could go as high as 200 MLD “if the projections support it.” The facility can be built in three to five years, but could be fast-tracked, he added.

Manila Water’s woes began as demand in its service area exceeded its Angat dam allocation by up to 150 MLD. It has been drawing from La Mesa dam to plug the deficiency but when the reservoir reached the critical level, water provision in some parts of the east zone became short. The current water shortage started on March 6 and worsened when initial service advisories prompted consumers in unaffected areas to store water in anticipation for service degradation.

“We had programmed plans to reduce the dependence on the La Mesa reserve like taking water from the Laguna Lake through our Cardona water treatment plant, re-activation of decommissioned deep wells, developing new deep well sources but we were met with technical issues and implementation delays,” Manila Water’s Mr. Dela Cruz said during the House hearing.

“We had also planned operational adjustments including lowering of pressure, in case we cannot withdraw anymore from the La Mesa reserve. With a supply deficit of about 150 [MLD], the main idea is to spread this now more limited supply to the same customer base by reducing the pressure in the system. This was implemented days before the La Mesa level came close to the critical level of 69 meters.”

On March 14, Manila Water implemented a more widespread water interruption plan to allow its network reservoirs to refill properly and its pumping stations to stabilize, he said.

“We had to reset. The results have been encouraging beginning March 15 as we have heard from our people on the ground. From a low availability of 70% water availability in our coverage when the supply shortage happened, we have improved to more than 80% last March 15, but we have to explain what 80% means. Water availability as we define at the moment, is having about 8 to 12 hours of water reaching the ground floor of homes. As of yesterday, using this new lower standard, we have reached close to 95% water availability in our coverage area,” he added.

In a statement on Wednesday, Manila Water said the Cardona plant had started delivering the initial 24 MLD to Binangonan, Angono, Baras at Jalajala, in Rizal province. It said by end-May supply from the plant could reach 50 MLD. — Victor V. Saulon, A. L. Balinbin and C. A. Tadalan