Water and sanitation privatization in metropolitan Manila, Philippines

Success by profitability and privatization of profits, the recipe of the World Bank in one of the biggest metropolitan areas of the world to ensure its vision on the "right to water"


Description

Until 1997, water services in metropolitan Manila were ran by the public company Metropolitan Waterworks and Sewerage System (MWSS). The company faced several problems: it had a US$880 million debt, non-revenue water was around 60%, infrastructure was old, it was unable to provide water to one third of the households and those connected to the service had an intermittent supply of 17 hours a day on average. These problems justified the decision of president Ramos to privatize the water service in 1997 with the support of the World Bank.

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Basic Data
NameWater and sanitation privatization in metropolitan Manila, Philippines
CountryPhilippines
ProvinceNational Capital Region
SiteMetropolitan Manila
Accuracy of LocationMEDIUM regional level
Source of Conflict
Type of Conflict (1st level)Water Management
Type of Conflict (2nd level)Water access rights and entitlements
Dams and water distribution conflicts
Water treatment and access to sanitation (access to sewage)
Specific CommoditiesWater
Project Details and Actors
Project DetailsMetropolitan Manila has been divided in two separated managerial areas: the east zone covers 8 cities, parts of 2 cities and 12 municipalities, while west zone covers 8 cities, parts of 2 cities and 7 municipalities.

In 1997 the World Bank designed a bidding process to choose the concessionaires for a period of 25 years. East zone was won by Manila Water Company Inc., initially a joint venture between Ayala Corporation, United Utilities, International Water Limited and Mitsubishi Corporation. Since 2002, IFC took a financial stake investing in the concessionary, perceive for many as a conflict of interest for a development bank as the WB. Two years after privatization, Manila Water was already a profitable company. In 2010, it was given a 15-year contact extension with no competitive biding.

West zone was won by Maynilad Water Services Inc., initially a joint venture between Benpress holdings Corporation and Suez. Due to financial problems, in 2006 Mayniland sold 84% of the company to the Philippine Government shifting its debt burden onto the public, in what is has been interpreted as a renationalization, and then re-privatized later in the same year.
Type of PopulationUrban
Potential Affected Population6.2 million for Manila Water / 8 million for Maynilad
Start Date1997
Company Names or State EnterprisesManila Water Company (MWCI)
Maynilad Water Servicies Inc (MWSI)
Suez Environnement from France
Relevant government actorsMetropolitan Waterworks and Sewerage Systems (public entity).

Philippine government

National Water Resources Board (NWRB)
International and Financial InstitutionsInternational Finance Corporation (IFC)
The World Bank from United States of America
Asian Development Bank (ADB)
Environmental justice organisations and other supporters- Bantay-Tubig (Citizens’ Network for Adequate, Potable and Affordable Water)

- Water for the People Network (https://waterforthepeople.wordpress.com)

- Freedom from Debt Coalition (http://www.fdc.ph)

- Institute for Popular Democracy (http://www.ipd.org.ph)

- IBON Foundation (http://www.ibon.org)

- Progresibong Alyansa ng mga Tagatangkilik ng Tubig sa Kamaynilaan (PATTAK) (Progressive Alliance of Metro Manila Water Consumers)

- Fisherfolk alliance Pamalakaya (https://pamalakayaweb.wordpress.com)
The Conflict and the Mobilization
Intensity of Conflict (at highest level)MEDIUM (street protests, visible mobilization)
When did the mobilization beginPREVENTIVE resistance (precautionary phase)
Groups MobilizingFishermen
International ejos
Local ejos
Local government/political parties
Neighbours/citizens/communities
Social movements
Trade unions
Ethnically/racially discriminated groups
Forms of MobilizationCreation of alternative reports/knowledge
Development of a network/collective action
Development of alternative proposals
Involvement of national and international NGOs
Lawsuits, court cases, judicial activism
Public campaigns
Impacts
Environmental ImpactsVisible: Surface water pollution / Decreasing water (physico-chemical, biological) quality, Groundwater pollution or depletion
Health ImpactsVisible: Deaths, Malnutrition, Infectious diseases
Socio-economic ImpactsVisible: Lack of work security, labour absenteeism, firings, unemployment, Violations of human rights, Increase in Corruption/Co-optation of different actors
Outcome
Project StatusIn operation
Pathways for conflict outcome / responseInstitutional changes
Court decision (undecided)
Strengthening of participation
Technical solutions to improve resource supply/quality/distribution
Public information campaigns on pricing and regulatory issues
Protests against regulatory failings and discretionary behaviour of the two concessionaires
Congressional inquiries on various aspects of water privatization
Pursuing legal action
Documenting cases of community resistance
Community-based water governance alternatives, as informal networks of water distribution
Development of AlternativesRemunicipalization of water and sanitation service
Do you consider this as a success?No
Why? Explain briefly.Privatization of water and sanitation services have worsened the living condition of inhabitants of Manila.
Sources and Materials
Legislations

Republic Act No.6957(1990) as amended by Republic Act No.7718 (1994): Build-Operate-Transfer (BOT) Law
[click to view]

National Water Crisis Act of 1995 (Republic Act No.. 8041)
[click to view]

Executive Order 311, s. 1996: MWSS Privatization Framework
[click to view]

References

Esguerra, J. "The Corporate Muddle of Manila's Water Concessions. New Rules, New Roles: Does PSP Benefit the Poor?" WaterAid and Tearfund (2003)
[click to view]

Nai Rui Chng. "Even Flow: Water Privatization and the Mobilization of Power in the Philippines". PhD thesis, London School of Economics and Political Science (2013)
[click to view]

Links

[2] Corporate Accountability International - Case Study: The Human Toll of Water Privatization in Manila
[click to view]

[3] Freedom from Debt Coalition report: Recalibrating the Meter: A ten-year overview of the MWSS

Privatization Deal. 2008. 31.

Other Documents

Freedom from Debt Coalition group The Freedom from Debt Coalition group dramatizes their protest on Wednesday against the Asian Development Bank 45th Annual Meeting in Manila. The group says privatization of the energy and water sectors, which the ADB has been promoting, is not helping the poor. (http://news.abs-cbn.com/image/images/05/02/12/group-protests-adb-annual-meeting)
[click to view]

Meta Information
ContributorAndreia Francés Silva, Máster en Gestión Fluvial Sostenible y Gestión Integrada de Aguas, Asignatura ‘Ecología política y gestión de Aguas’
Last update16/09/2016
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