top of page
  • Arjun Thapan


“Uneasy lies the head that wears a crown” – King Henry IV, Part 2 by the bard, William Shakespeare – meaning ‘the king, who has great responsibilities, never sleeps soundly’

Manila Water Company (MWC) built an enviable reputation over the years; I was always proud to quote Manila’s remarkable water transformation to water audiences across the world. 24/7 water supply across its service area; good pressure; good water quality; consumer responsive – all at affordable prices. It has been the model of good urban water governance. But it slept, and let its reputation get ahead of itself. Unlike Henry IV who never lost his crown, MWC is close to seriously denting its good name.

The current crisis in Manila’s east zone, the concession area of MWC, is mystifying. Lets start with the mixed, and ever-changing messages from MWC over the past 10 days:

  • On March 8, it announced that it would be implementing operational adjustments across the entire East Zone to help arrest the rapid decline of water levels in the La Mesa reservoir due to limited rainfall

  • The El Niño effect was likely to continue through the summer and supply interruptions will have to give way to formal rationing of supplies (service advisories to this effect were issued)

  • It was not a supply issue, but a demand-led problem; MWC could not cope with the increased demand as a result of 4% population growth in its service area over the past 3 years

  • It was a demand issue, but not because of population growth; demand had increased because of scarcity of supply and the propensity of consumers to store water

  • On March 18, it said that the problem would be solved by 31 March and would not extend into the summer months

So what is fact, and what is fiction? Here are some unanswered questions:

  1. The La Mesa reservoir supplies 150 mld of MWC’s total withdrawal of 1750 mld. Its decline to the 69-meter non-operational level could not have happened overnight. Did MWC not foresee a short- to medium-term drop in the level? Is supply forecasting not part of operational planning?

  2. If the drop was foreseen in good time (as it should have), and there was a clear risk to meeting demand, why were steps not taken to (i) secure additional supplies through, e.g. a transfer from Angat to La Mesa (as suggested by President Duterte), (ii) alert consumers to the possibility of supply restrictions and manage demand, (iii) ‘borrow’ from Maynilad (as is now happening, and as has been done in the past); and augment supplies from deep wells?

  3. If demand as a function of population growth was the cause of disruptions, why was the growth in demand not anticipated? It is standard utility practice to do so. If a demand spurt is clearly foreseen, measures to cope with it are also put in place (increased supplies; conservation; pricing; further reduction of water losses, etc.). Why did this not happen?

  4. Maynilad, the west zone concessionaire, supplies 2,360 mld to 9.4 million consumers averaging a daily per capita supply of 175 liters. This assumes a non-revenue water figure of 30%. In the case of MWC, the total daily supply is 1,600 mld (if we discount the entire 150 mld from La Mesa for the moment) to 6.7 million consumers. Its average daily per capita supply is 211 liters, assuming a non-revenue water figure of 11.5%. Two points stand out. First, the 20% inequality in supply between the two zones is inexplicable in macro terms – unless MWC has a customer base profile that is completely different to Maynilad. Second, if the west zone is happy with 175 lpcd, there is no reason why consumers in the east zone should be suffering disruptions in service, and no-service in many cases, at 211 lpcd. This should be explained by MWC.

  5. Finally, if supplies are likely to be fully restored by 31 March what happened to the El Niño effect? Will La Mesa’s water levels have magically recovered to the pre-March 2019 figure of 69 meters? Is this an MWC, or PAGASA forecast? Or was this simply a red herring to start with?

Most of us seem to forget that MWC does not have single point responsibility for the quality of its services. The MWSS Regulatory Office (MWSS-RO) administers the concession agreements in place between the two private contractors and MWSS. It has a higher responsibility. Here are some questions for it:

  1. Does the MWSS-RO undertake monthly monitoring of contractual service parameters of the concessionaires? If yes, why did it not pick up the growth in demand claimed by MWC, along with declining supplies? And if it did, why was no action taken to require the concessionaires to take necessary measures to manage demand and/or augment supplies? Further, if no solutions were found, why were consumers not informed and contingency plans made to introduce conservation, rationing, and restricting hours of supply?

  2. Has MWSS-RO ensured that both concessionaires have a fully developed climate adaptation plan that is being faithfully implemented? Were climate vulnerability assessments undertaken, and resources allocated to short-, medium-, and long-term adaptation projects? Did the MWSS-RO monitor and guide the implementation of these projects, and with what results?

  3. Finally, in terms of the current crisis, it seems that the MWSS-RO has not been asking tough questions of MWC, and has simply regurgitated the conflicting messages being put out by the former. How does this sit with his role and mandate, i.e. has the regulator been negligent? This should be inquired into as the basis for instituting wholesale reform of the MWSS-RO.

Many among us will recall the Day Zero scenarios in Cape Town in 2017 when water supplies were scheduled to run out. Its water utility, together with the consumers and the government, put in place measures that dropped consumption by 60% to enable households to meet basic needs pending an improvement in supplies. Similarly, California mandated, and successfully fulfilled, a 25% reduction in water consumption across the board at the height of its drought 3 years ago.

There is no dearth of examples where governments and utilities have been proactive in managing water efficiently.

Water is a highly emotive issue. Utilities that claim to be professionally run trifle with it at their peril. Examples abound. Europe, for instance, is witnessing an increase in the demand for ‘remunicipalization’ of water utilities as a consequence of growing public perception that privately managed utilities are not delivering on their commitments. MWC and Maynilad are pioneers in developing Asia – they simply cannot afford to fail.

As I said, building a reputation is tough, requiring consistent, dedicated hard work. Dropping the ball is easy. And the impact in a metropolis as large as Manila, that contributes 37% of the country’s GDP, is deep and widespread. The current public disillusionment, even resentment, with MWC, and the concept of private delivery of a public service, is well founded.

Full service will, of course, be restored soon. But the deeper questions need to be addressed, and with some urgency. Most importantly, the regulatory arrangements need radical surgery. A strong, well-equipped and resourced, independent regulator is a sine qua non for Manila’s concession arrangements to function effectively – if MWC and Maynilad are to retain their place in the firmament of the world’s leading water utilities.


704 views0 comments
bottom of page