The Manila Water Concession Agreement (MWCA) is a crucial issue in the Philippines, particularly in the metro region of Manila. It is a public-private partnership that governs water services in the east zone of Metro Manila, covering an area of 23 cities and municipalities with a population of over 12 million people.
The MWCA was signed in 1997 between the Philippine government, through the Metropolitan Waterworks and Sewerage System (MWSS), and Manila Water Company, a subsidiary of Ayala Corporation. The agreement aimed to improve water services in the east zone of Metro Manila by providing the necessary funds for infrastructure development, rehabilitation, and expansion of water distribution systems.
Under the MWCA, Manila Water was granted a 25-year concession agreement to operate and manage the water distribution system in the east zone of Metro Manila. The agreement also stipulated that Manila Water would provide adequate and affordable water services to its consumers, adhere to environmental standards, and invest in infrastructure to improve water services.
However, the MWCA has been subject to controversy in recent years. In 2019, the Philippine government conducted a review of the MWCA and found that Manila Water had breached its obligations under the agreement. The review resulted in a fine of 1.13 billion pesos for Manila Water and the termination of the automatic rate adjustment mechanism, which allowed Manila Water to increase water rates based on inflation and foreign exchange rates.
The termination of the rate adjustment mechanism has affected Manila Water`s ability to finance the necessary infrastructure projects required to improve water services in the east zone of Metro Manila. This has led to concerns about the sustainability of water services in the region, particularly given the rapid population growth and urbanization in the area.
The MWCA is a complex issue with significant implications for the people of Metro Manila. While the termination of the rate adjustment mechanism has caused short-term financial difficulties for Manila Water, it is essential that the company adheres to its obligations under the agreement and invests in necessary infrastructure for the long-term benefit of its consumers. As the government and Manila Water continue to negotiate the terms of the MWCA, it is hoped that a solution will be reached that benefits all parties involved.