Privatization of the Metropolitan Waterworks and Sewerage System (MWSS)

The Metropolitan Waterworks and Sewerage System (MWSS) holds the distinction of being one of the oldest and most formidable government organizations in the Philippines. Its roots were traced to the first water system laid out in old Manila in 1878 from funds donated by Spanish philanthropist Francisco Carriedo y Peredo.

The construction of a water system in 1878 delivered 16 million liters of water per day (MLD) to 300,000people. Its main objective was to improve the people’s health and living conditions through clean drinking water.

The Carriedo System had evolved from the Manila Water Supply System in 1908 to Metropolitan Water District in 1919. Thirty-five years later, it became the National Waterworks and Sewerage Authority (NAWASA).

The government changed its nomenclature again in 1972 to Metropolitan Waterworks and Sewerage System (MWSS), by which it is known to this date. From a national agency, attending to water needs of the entire Philippines, the MWSS by virtue of its Charter was tasked to provide water to Metro Manila and environs.

The MWSS, in spite of all its efforts, through the years has hardly satisfied the needs of the consuming public. Manifestations of which was the increasing demand for better water services across the sub-sectors. This dilemma basically paved the way for the government to introduce urgent and significant measures for conservation of the water resources and improve the management of the water industry.

Many laws were promulgated for the purpose of addressing the water crisis. However, the most significant and related to the operation of the water utilities, among others, was the National Water Crisis Act of 1995 (RA #8041). This law states the need for the government to adopt urgent and effective measures to address the nationwide water crisis which adversely affects the health and well being of the population, food production and industrialization process.

These was followed by the enactment of Executive Order No. 286 which affected the reorganization of the MWSS and Local Water Utilities Administration (LWUA) to enable these agencies to become more effective, efficient and responsive to the country’s needs for potable water.

In March 1996, Executive Order No. 311 was implemented. This policy encouraged the private sector’s participation in the operation and facilities of MWSS.

As a result of these numerous adjustments, the MWSS – on its 120th years of continued service to the people- was privatized. This bold move was aimed at improving the water delivery service.

The responsibility to operate and improve waterworks system was passed on to the two private consortia in conformity to the Concession Agreement. This contractual agreement was entered into by the Republic of the Philippines through the MWSS, the Maynilad Water Services Inc. (MWSI) for the West Zone and the Manila Water Company, Inc. (MWCI) for the East Zone.

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The Regulatory Office

The MWSS Regulatory Office (RO) was created in August 1997 by virtue of the Concession Agreements signed between the MWSS and the two concessionaires, Manila Water Company, Inc. for the West Zone and Maynilad Water Services, Inc. for the East Zone.

RO functions as a collegial body composed of five members headed by the Director or Chief Regulator who has over-all responsibility for the operation of the office. Other members are the Regulators for Technical Regulation, Customer Service Regulation, Financial Regulation and Administration and Legal Affairs.

Any action or decision by the RO on substantive matters affecting the Concession Agreement requires at least a majority vote of three members. The Chief Regulator chairs the meeting of the Regulatory Office and has the final approval over the hiring and dismissal of all professional staff of the RO. He also acts as the principal spokesperson of the office.

RO is mandated to monitor the Concession Agreement. Among its many functions, RO reviews, monitor and enforces rates and service standards; arranges and reports regular independent audits of the performance of the Concessionaires; and monitors the infrastructure assets. However, RO’s functions may change over time for effective regulation of water and sewerage services.

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