Manila Water Company, Inc. ("the Company" or "Manila Water") is a Philippine company that holds the exclusive right to provide water and wastewater services to the eastern side (“East Zone”) of Metro Manila, under a Concession Agreement (CA) entered into between the company and Metropolitan Waterworks and Sewerage System ("MWSS") in August 1997.
The original term of the concession was for a period of 25 years to expire in 2022. The company’s concession was extended by another 15 years by MWSS and the Philippine Government in 2009, thereby extending the term from May 2022 to May 2037 (Concession Agreement Extension).
Under the terms of the CA, the company has the right to the use of land and operational fixed assets, and the exclusive right, as agent of MWSS, to extract and treat raw water, distribute and sell water, and collect, transport, treat and dispose wastewater, including reusable industrial effluent discharged by the sewerage system in the East Zone. The company is entitled to recover over the concession period its operating, capital maintenance and investment expenditures, business taxes, and concession fee payments, and to earn a rate of return on these expenditures for the remaining term of the concession. As the company has the exclusive right to service the East Zone, no other entity can provide water services within this area.
The company currently serves more than six million customers in the East Zone. The East Zone encompasses 23 cities and municipalities spanning a 1,400-square kilometer area that includes Makati, Mandaluyong, Pasig, Pateros, San Juan, Taguig, Marikina, most parts of Quezon City, portions of Manila, as well as the following towns in Rizal: Angono, Antipolo, Baras, Binangonan, Cainta, Cardona, Jala-Jala, Morong, Pililia, Rodriguez, San Mateo, Tanay, Taytay and Teresa.
Aside from the East Zone, the company currently has three operating subsidiaries in the Philippines, namely Laguna AAAWater Corporation (Laguna Water), Boracay Island Water Company (Boracay Water) and Clark Water Corporation (Clark Water). A fourth subsidiary, Manila Water Consortium, which provides bulk water in the province of Cebu, commenced operations on January 5, 2015.
The Group also has a presence in Vietnam through two affiliated companies, namely Thu Duc Water B.O.O Corporation (Thu Duc Water) and Kenh Dong Water Supply Joint Stock Company (Kenh Dong Water), and a holding company listed in the Ho Chi Minh City Stock Exchange called Saigon Water Infrastructure Corporation (Saigon Water). Thu Duc Water and Kenh Dong Water supply treated water to Saigon Water Company under a take-or-pay arrangement. The company’s pilot leakage reduction project in Ho Chi Minh City which started in 2008 was completed in August 2014.
The company continues to explore new business opportunities. Consequent to the expansion programs of Manila Water and the establishment of several subsidiaries, the company has formulated and implemented transfer pricing policies. The policies ensure that the inter-company transactions are done at arm’s length and that no cross-subsidies exist between Manila Water and its subsidiaries. The transfer prices, which are based on market prices, were set for all expenditures related to the provision of services, works and supplies. These include salaries for seconded employees, services fees for rendering support and management services, rental of equipment, cost of staff training and development, supplies and materials.