Maynilad Water details pipe-rehab program

MANILA, Philippines - Maynilad Water Services, Inc. (Maynilad) is seeking to improve water supply in its concession area by providing water nonstop by 2012. In a statement, Maynilad said it had borrowed $365 million to partially fund its program to rehabilitate the pipe network throughout the West Zone and significantly reduce system losses four years from now. Maynilad serves Pasay, Caloocan, Las Piñas, Parañaque, Valenzuela, Muntinlupa, Manila except Sta. Ana, some areas of Makati and Quezon City, Malabon and Navotas, as well as Cavite, Rosario, Imus, Noveleta, Bacoor and Kawit. Maynilad’s plan involves replacing old pipes and building new water facilities to provide 24 hours of water supply at a good pressure to 100% of the West concession by 2012. Maynilad President Rogelio Singson said they had allotted P5 billion last year and P8 billion this year for its capital expenditure. Maynilad’s five-year spending program until amounts to a total of P40 billion. Aside from beefing up the investment for pipe rehabilitation and network expansion lined up in the next four years, part of the loan proceeds will be used to bring down the company’s nonrevenue water — or unbilled water due to leaks and illegal connections — to 40% or lower from its current level of 66%. A major component of Maynilad’s nonrevenue water program is the reconfiguration of its existing pipe network into 36 smaller hydraulic areas for better supply management and more efficient network troubleshooting. Maynilad’s $365-million corporate note facility is made up of two series — the first is a peso-denominated loan worth $240 million, and the second, which is pending approval by the central bank, is a $125-million dollar-denominated loan. The company almost shut down four years ago after failing to recover from the 1998 Asian currency crisis, which eventually forced Lopez group, the former owners, to file for corporate rehabilitation and give up its controlling stake in the company in 2005. In 2007, a consortium made up of listed- DMCI Holdings, Inc. and Metro Pacific Investments Corp. took over the water concessionaire, bringing in fresh investments and facilitating the company’s swift exit from rehabilitation. After Maynilad got out of financial rehabilitation early this year, the company was welcomed back by credit markets, giving it access to less expensive means of financing for its water supply improvement projects. — Ava Kashima K. Austria, BusinessWorld