FOLLOWING THE FLOW

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FOLLOWING THE FLOW

• An Update on the Philippine Water Sector Scene

Mary Ann Manahan Focus on the Global South,
Philippines Programme September 5, 2006
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Picture of Water Supply Delivery in the
Philippines

• Water service delivery is still public
• URBAN 70- Water Districts, Local Govt Units
  (LGUs), community-based organizations
• 30- Private operators, Small Scale Independent
  Water Providers and household self-supply
• RURAL 65 (public) - 35 (private)
• National About 25-27.5 are serviced purely by
  the private sector (but GROWING)
• BUT almost half of the water utilities
  (especially the LGU-run) are no longer operating
  for many reasons (key constraint financial
  sustainability, operational viability, legitimacy
  and accountability, regulation, etc.)

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Picture of Philippine Water Supply

• Deteriorating access to safe drinking water 80
  even lower for poor segment of the country 20
  for sanitation (questionable whether Phil. can
  achieve MDG goal by 2015)
• EVEN worse for access to sewerage (septic tanks,
  on-site treatment and disposal)
• Regulation is a mess and with overlapping
  functions of different government agencies
  (better defined for public rather than for
  private concessions and operators)
• Privatization Increasing role of private
  concessions and operators (as pushed by both the
  National Government and the WB and ADB) esp. for
  megacities and credit-worthy water districts
  operating in major cities

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Picture of Philippine Water Supply

• Where major European water TNCs are present (Suez
  in Manila, Veolia in a section of Metro
  Manila/Fort Bonifacio, and Clark Special Economic
  Zone, Biwater in Subic Freeport Area) in
  partnership with
• Domestic water companies (construction, land
  interests)
• Problems with privatization (e.g. Metro Manila,
  Magdalena in Laguna)
• Failure to fulfill contract obligations High
  water tariff rates, NRW increase, Non-investment
• Exacerbating unequal access to water
• Taxpayers and consumers bearing the brunt
• Non-transparency and unaccountability to water
  users and consumers
• Threat to the existence of long-established and
  functioning community-water supply service
  providers
• In this context, how do we define alternatives in
  the Philippines when water service delivery is
  still public but problematic and when you have
  failed privatization projects?

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Alternatives in the Philippine Context

• Ensuring that constituents (communities) have
  access to participate in the management and the
  devt of the water sector (question and frame of
  how WE want our water (services and resources)
  managed?)
• Strengthening community-based water service
  providers rather than outright support for
  privatization
• Community-based water service models (water
  cooperatives and water associations) in rural,
  urban and peri-urban areas- most successful
  compared to other models (as operating and
  providing water supply services in a community
  w/in a defined watershed)

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Alternatives in the Philippine Context

• Well-defined and clear rules for the players in
  the sector (agreeing on a democratic framework of
  management and development of the sector)
• Building legitimacy, support (subsidies,
  political, policy environment) for community
  management models
• strategies for water supply services become more
  effective when they are involved
• Reforms within public water utilities are
  possible (e.g. Magdalena, Zamboanga)
• Context-specific solutions (and not a blanket
  model of water supply and service delivery)

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Alternatives in the Philippine Context

• Developing alternative financing schemes that
  would nurture such community-led initiatives (vs.
  IFIs financing)
• Important elements in the building of
  alternatives
• Access to and control of water who, what and how
  (communitys/consumers rights to water as basic
  human right)
• Legitimacy and accountability
• Financial sustainability
• Resource sustainability
• Socio-political sustainability
• Operation viability (technical and
  organizational)
• Legal identity
• Conducive policy environment and legal framework
• Independent functional regulatory system
• Replicability
• Challenging task of developing alternatives to
  privatization (within and post) in Metro Manila

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Update on Metro Manilas West Zone

• Failed privatization Lopez-family (former
  partner of Suez in Maynilad) was bailed out by
  National Government/MWSS through government
  buying 84 of the Maynilad at US22 M (from US57
  M) via rehabilitation (approved last year despite
  opposition from public interest groups)
• West Zone up for rebidding- attracted 9
  companies/consortia now down to 4 Asian
  companies Manila Water, Singapores Noonday
  Asset Management Asia Pte. Ltd., Indias
  Karunakaran Ramchand and DMConsunji, Inc.
• Suez unclear if will stay on tag along
  provision
• Minimum bid of US54 million, performance bond of
  30 million
• WB loan of US 220 M for Maynilad rehab
• MWSS whoever has the most money should operate
  in the West Zone (as if nothing happened)

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Possible Scenarios

• Ayala-led consortium wins (WB monopoly is ok)
• Dark horse wins
• MWSS through Maynilad is forced to continue being
  the service provider in the West Zone
• West Zone Operator, whether public or private
  fails and Local Governments decide to take-over
  the service area of MWSS
• Derailing of rebid
• (Our) Legal case case against Maynilads
  rehabilitation is upheld by the Philippines
  Supreme Court and rebidding will be derailed
• Arroyo stops the bidding as part of a vendetta
  against the Ayalas

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Initiatives and Campaigns

• Development Roundtable Series on water resources
  and services process (coming up with alternatives
  for the West Zone through roundtables
  discussions, research/mapping and negotiations
  with different groups)
• Dividing up the west zone LGU-managed areas in
  the West Zone Community-led initiatives (e.g.
  water cooperatives) supported by Local government
• Reforming the MWSS (public sector enhancement
  capability program)

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Initiatives and Campaigns

• Bantay Tubig, a network of public interest groups
  and CSOs advocating for universal access and
  coverage to safe drinking water and sanitation,
  is gearing up for an intensive campaign on
  Maynilad rebidding
• Strategy of multiple messages from different
  standpoints in common venues that will be
  organized derail or universal coverage as
  conditionality for intervention in the rebidding
• Multi-pronged approach court cases,
  congressional hearings, public meetings,
  dialogues with MWSS and popular mobilizations,
  mobilizing support of mayors from Metro Manila
  towns and cities with significant number of
  waterless communities, international solidarity
  work (especially for pressure and info exchange
  on similar experiences and alternatives)
• FDCs Blue Drop Campaign

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Some thoughts on What we can/need to do
Asian-level and Europe-Asia cooperation

• Better coordination-collaboration and
  information exchange on the different initiatives
  and campaigns on water in the Asian region and
  Europe (e.g. popularizing the PUPs discourse in
  Asia/concrete links with anti-privatization
  work/issues)
• More people-to-people exchanges of
  experiences/lessons learned (inter-regional and
  intra-regional/ country-level N-S S-S)
• Watch out for the rise of Asian TNCs as big
  players in the water sector
• Work towards an agreed framework on how we want
  our water as part of the regional commons to be
  managed

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• THANK YOU FOR LISTENING!