In 2012, IMC Worldwide began assisting the Philippines Public-Private Partnership Center in the development and delivery of a public-private partnership project to improve water supplies for a million citizens in the Bulacan district eleven kilometres north of Manila.
Bulacan’s water supply challenges include inadequate supply, low water pressure, intrusion of saline water, and aging distribution pipelines.
The Philippines, meanwhile, suffers a huge infrastructure funding shortage and is also one of the fastest-growing population in the world. It is also particularly affected by climate change, frequently jolted by earthquakes, and hit by cyclones two to three times a year.
Within this scenario, finding funding for large-scale infrastructure projects is a major challenge for a government already suffering scarce resources.
For countries facing such a scenario, public-private partnerships, which offer opportunities for government to fund and manage development projects with private sector companies, are one mechanism that can help generate funding needed for large-scale projects.
A foundation for better water provision
Our role, starting in 2012, has been to work with the country’s Public-Private Partnership Center to conduct feasibility studies for the project and assess whether a large-scale PPP to improve Bulacan water supplies could really work.
After discussion with government, completing feasibility studies, conducting the financial modelling, and offering advisory services about tendering to select a private sector partner, the tendering process began in 2014 and concluded in December 2015 with the selection of a private partner.
A contract has now been signed between the Metropolitan Waterworks and Sewerage System (MWSS) and a private sector consortium of San Miguel Corporation and Korea Water Resources Corporation (K Water).
The contract agreements stands at 24.40 billion Philippines pesos, equivalent to approximately 350m British pounds, with a 30-year cooperation period.