Metro Manila needs new water source - ADB

By Cai U. Ordinario, BusinessMirror

Posted at Jul 04 2012 06:49 AM | Updated as of Jul 04 2012 06:46 PM

MANILA, Philippines - The Philippines’s biggest challenge in the water sector is finding new water sources for Metro Manila because relying solely on Angat Dam may not be sustainable, according to the Asian Development Bank (ADB).

In the report titled “Good Practices in Urban Water Management: Decoding Good Practices for a Successful Future,” the ADB said having only one large source of water in a disaster-prone megacity presents risks that may “severely affect Metro Manila” in the near or long term.

“A number of challenges face the Metro Manila case. Foremost of this is the reliance of the metropolis on a single, large source of water, the Angat Dam. In a country prone to earthquakes and increasing incidences of drought [El Niño], damage to the Angat Dam or prolonged drought will severely affect Metro Manila and the utility area or responsibility,” the ADB report said.

“The threat of depletion of the underground-water aquifer due to excessive groundwater extraction makes deep wells less efficient and harmful to the environment. The critical challenge is to develop new sources of water,” it added.

The government earlier sought to remedy the situation through the proposed Laiban Dam in Tanay, Rizal. The project, scheduled to be developed and brought on-stream in 2012, was intended to provide a steady supply of water as a backup to the Angat source.

However, the project ran into controversy surrounding the “take-or-pay” agreement reached between the Metropolitan Waterworks and Sewerage System (MWSS) and San Miguel Bulk Water Co. Inc. (SMBWCI) on the Laiban Dam project.

A take-or-pay arrangement happens when one party agrees to buy a specific amount of another party’s goods or services or to pay the equivalent cost even if the goods or services are not needed. This meant that if the Laiban Dam’s capacity is around 1,900 million liters per day and the possible requirement of Metro Manila is lower, the entire 1,900 million liters per day would still have to be paid for.

The controversy and the opposition of the two water concessionaires, Manila Water Co., Inc. (MWCI) and Maynilad Water Services Inc. (MWSI), to the construction of a single complete unit rather than making the dam scalable over time eventually put the project on hold by the end of 2009.

“The Angat Dam provides 98 percent of the water needed by Metro Manila. From a water security point of view, this is a potential problem. Should anything happen to the Angat Dam [e.g., a major earthquake], Metro Manila residents would lose their single and major source of raw water. Thus, there is a need to develop an alternative source as a backup,” the report said.

Other challenges in the water sector, the ADB said, include the fast-rising price of water and the risk to the two utilities is the presence of a two-office MWSS. The MWSS has a Corporate Office (MWSS-CO) and a Regulatory Office (MWSS-RO).

The ADB said that with rising costs needed for sewerage and sanitation needs, Metro Manila residents should expect higher water rates in the next few years. Customers used to 24-hour water service, the ADB said, will find water rates “excessively high.”

The two-office MWSS, the ADB said, presents a regulatory risk. The report recommended that the government make the regulatory office the principal entity which deals directly with utilities, while the corporate office must become a “smaller entity limited to ministerial functions” that will be in charge of recording and documenting government assets.

The study also identified seven universal themes to serve as a model for replication by water utilities, corporatization for better accountability; economic sustainability; unaccounted-for-water reduction; holistic approach to manage water resources including water supply and wastewater management; staff productivity; collaborative engagement among the government, utilities and society; and inclusive approach to addressing the needs of the urban poor.

“Asian water utilities need to show innovation to provide service to low-income households, the study says, noting that each of the eight water agencies studied provided some kind of subsidy for obtaining a water connection and, in deserving cases, for the use of water as well,” the ADB said.

Launched on Tuesday at the Singapore International Water Week, the study cites Singapore as one of the models for water management, which other Asian cities can learn from. The country has a low level of lost water due to leakage, a strong government commitment for water sustainability, and is pricing water to take in the full costs of delivery and management.

The study, which is a collaborative effort between ADB and the Institute of Water Policy, Lee Kuan Yew School of Public Policy, National University of Singapore, provides new insights into urban water management in the cities of Bangkok, Thailand; Colombo, Sri Lanka; Jamshedpur, India; Kuala Lumpur, Malaysia; Manila, Philippines; Phnom Penh, Cambodia; Shenzhen, People’s Republic of China; and Singapore.