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Water Concession Agreement Philippines

In 2010[update], the sewer line connection rate was 16% in West Manila and 8% in East Manila. Wastewater is also discharged through open sewers that drain rainwater. 83% of the 2 million cubic metres of wastewater produced each day is untreated. [42] The concession contracts originally provided for an increase in sewer access from less than 10 per cent to 66 per cent in West Manila and 55 per cent in East Manila by 2021. This would have resulted in investments of more than $1.8 billion, resulting in a doubling of water rates. Before the bankruptcy, Maynilad had asked that its target be reduced to 31%. [21] The new targets for sewers in West Manila are 14% by 2012; 31% by 2016; 66% by 2021; 100% by 2037. For East Manila, the targets are 30% by 2012; 45% by 2016; 63% by 2021 and 100% by 2037. [42] The two private companies had to first reserve a performance obligation that could be called by MWSS if the companies did not meet their obligations. Maynilad had recorded $120 million because it had a larger share in the concession and former MWSS debt, and Manila Water $80 million. [10] The change in the average rated water tariff in Manila in pesos per cubic metre and, as a share of 1996 tariffs, after adjusting for inflation, resulted in high costs, in part because it had contracted suez subsidiaries without tender. He also brought in new employees of his parent company, Benpres, who were inexperienced in the water supply, which caused tensions and reduced the motivation of established employees. Maynilad therefore invested in the development of access in the western zone, but soon found itself in financial difficulties due to its economic model and the high weight of sovereign foreign exchange debt.

[16] It slowed down its investments and stopped paying the concession fee to the government in full in April 2001. [20] In order to avoid bankruptcy, the government had to provide bridge financing for Philippine public banks to MWSS. After the financial crisis, international banks were unwilling to lend to Maynilad and the owners were not willing to inject more capital. [18] In early 1997, Proposals for Metro Manila`s east and west concessions were submitted by four private sector bidders, all of whom were joint ventures between an international water system manager and a local company.

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Deepak Kamboj

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