Friday, 30 May 2014

Myanmar project pushed

MANILA WATER Company, Inc. expects to complete the feasibility study for its non-revenue water project in Myanmar within the year, the Ayala-led utility’s top official said last week.

The development falls under the memorandum of agreement signed by the joint venture of Manila Water and Mitsubishi Corp. with the Yangon City Development Committee last March.

“The first phase is really undertaking a feasibility study. We’ve already started and we’re on track for the first phase,” Manila Water President and Chief Executive Officer Gerardo C. Ablaza, Jr. said in an interview at the sidelines of the World Economic Forum on East Asia in Makati City. “It’s a six-month study. We have finished about two months so I think we’ll be doing four months more.”

He explained that the study will determine what need to be done to make the water system in Yangon City more efficient.

Upon completion of the first phase, Mr. Ablaza said Manila Water will proceed with the second phase -- which would take at least 12 months -- involving a pilot test.

The official explained the phase will cover several portions of the city for verification of study results.

“The third phase will depend on how we perform in the pilot and what our findings are. We may get into a longer project development period,” Mr. Ablaza added.

The third phase, he said, involves implementation of the actual model that will be used to improve water distribution in city.


Besides Myanmar, Manila Water is also keen on establishing presence in Indonesia, where its first attempt failed due to the lack of a government approval.

Mr. Ablaza said last month Manila Water was exploring a public-private partnership project in Sumatra, a water project that will be developed in the city of Bandar Lampung. Manila Water was earlier judged as one of the four qualified bidders for the project, which would involve construction and operation of a water treatment facility, as well as rehabilitation of the city’s water distribution network.

“We’re still waiting for their final terms of the bid because they’re still working between the Ministry of Finance and the local government unit, who will be the client,” Mr. Ablaza said.

“I thought we would have the terms of the bid out by the second quarter but clearly it’s not going to happen. So to be conservative, maybe towards the end of the year for the actual bidding.”

Last year, Indonesian firm Suez Environnemen failed to secure the government’s approval for the transfer of its 51% equity interest in PALYJA to Manila Water’s subsidiary, Manila Water South Asia Holdings Pte. Ltd. A share purchase agreement was signed in October 2012 for the purchase of the majority stake in PALYJA, which operates the water supply services in Western Jakarta.

Outside the Philippines, Manila Water already has existing ventures in Vietnam. It holds 49% stake in Thu Duc Water B.O.O. Corp. and 47.35% in Ken Dong Water Supply Joint Stock Co. -- which are both water suppliers in the country. Last year, the company also acquired a 31.47% interest in Saigon Water Infrastructure Corp., which engages in water infrastructure projects.

Manila Water primarily provides water and wastewater services to the east zone concession area covering the cities of Makati, Mandaluyong, Pasig, Pateros, San Juan, Taguig, Marikina; parts of Manila and Quezon City, as well as some areas in Rizal province.

The company’s three local subsidiaries that operate outside its concession area in the country are located in Laguna, Boracay and Pampanga.

Manila Water booked a P1.431-billion net income as of end-March, up by 7% from P1.333 billion in three months last year. Revenues rose 5% to P3.827 billion from P3.637 billion, while cost of services and operating expenses grew at a faster rate of 8% to P1.099 billion from P1.017 billion.

Shares of the company shed 50 centavos or 1.89% to close at P26 apiece on Friday last week from P26.50 each on Thursday.

source: Business World Online
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