The year 2019 marks the most challenging year in Manila Water’s history. For 22 years, the company has worked to improve water supply to the eastern half of Metro Manila, and has succeeded, year after year, despite the absence of an additional water source, in realizing operational efficiencies and excellent customer service in terms of 24/7 delivery of clean potable water, that is, until the summer of 2019. 

This article intends to put on record the events that led to the crisis, what actions were done by Manlia Water and its key stakeholder partners, what lies ahead and most importantly, what the organization has learned to mitigate any future impact to the customers and utimately restore public trust. 

 

MANILA WATER’S TWO DECADES OF IMPROVED WATER SERVICE 

When Manila Water won the bid for the Metro Manila East Zone concession in 1997, only a quarter of the population in its service area had access to 24/7 water supply. Systems losses or non-revenue water from leaks and pilferages was at least 63 percent then, which meant almost two thirds of the water that was treated at the Balara Filters never reached the customer.

As part of the Concession Agreement with the Metropolitan Waterworks and Sewerage System (MWSS), Manila Water contractually should receive 40 percent of the MWSS raw water allocation of 4,000 million liters per day from the Angat-Ipo source which, for over two decades, remains the primary water source of Metro Manila.

Despite the challenges of the Asian financial crisis at the time, Manila Water invested in capacitating and motivating the workforce – the same people who used to run the government utility – and turned around the organizational culture into one that was merit-based and customer-centric. Novel technological solutions and territory management approaches were adopted, and there was heavy investment in replacing the antiquated pipes in the distribution network. 

Five years after the start of the concession, the non-revenue water started to go down and settled at around 11 percent by the end of the first decade of operations up to the present. Recovered water from losses reduction, at least 750 million liters per day, became the water with which new customers were served, and in effect, the recovery of water losses could be seen as having averted the earlier onset of a water crisis as MWSS has not yet completed any major water source development projects, such as Laiban Dam or Kaliwa Dam. By the end of 2018, Manila Water had almost one million service connections in its concession area, the growth of which was fueled by giving water access to the base of the pyramid as well as expanding into unserved communities within the MWSS franchise area.

Despite the increase in customer base, Manila Water’s raw water allocation of 1,600 MLD from Angat has not increased since 1997. Laiban, Kaliwa or any new water source projects have been delayed and are yet to be implemented by the MWSS. 

 

THE NEED FOR NEW WATER SOURCES

As the water security agency in Metro Manila and part of adjacent provinces, it is the mandate of MWSS to develop. The concessionaires’ role is to abstract raw water from the available sources, treat it to become potable and distribute it to customers, and provide sanitation and sewerage services. As early as 2003, after seeing the demand patterns and population growth projections in their respective concession areas, the two concessionaires already communicated to MWSS the need to develop new water sources.

The improvement in water supply availability for each Manila Water’s customers that led to billed volume growth in the last 22 years was driven mainly by efficiency in distribution network operations. But Manila Water knew that water recovered from reducing losses is finite. Non-revenue water at 11 percent is already considered world class, as evidenced by international accolades on Manila Water, and efforts in further reduction to single digit levels are deemed uneconomical and marginally beneficial to address the supply gap.

Demand and supply projections of MWSS and the concessionaires generally agreed that towards the end of the second decade of privatization, the gap between raw water supply and customer demand will be uncomfortably tight as summer peak demand equals the available raw water supply. The completion date of Laiban Dam, already in the MWSS drawing board since the 1980s, kept being pushed back due to environmental, social and governance issues. Further compounding the impending supply deficit was the decision of MWSS to provide raw water to the Bulacan Bulk System serving Bulacan municipalities using the same 46 CMS Angat water allocation for MWSS. By the year 2010, it was clear to everyone concerned that the large new water source will not be implemented in the next decade. According to MWSS, the completion of the delayed Kaliwa Dam project, intended to supply 600 MLD raw water to the concessionaires, is forecast to be operational in 2024, at the earliest.

Thus, in the 2013 and 2018 rate rebasing exercises when business plans were submitted, Manila Water proposed to develop medium-term water sources which would have served as a bridge between the limited water supply of Angat and the next big source which was to be completed by MWSS in 2024. Of the list of projects proposed by Manila Water, only the Rizal Province Water Supply Improvement Project (incorporating the Cardona Water Treatment Plant which takes raw water from Laguna Lake) was approved only two years after the 2013 rate rebasing, when the timelines were already tight. The rest were removed from the approved list of projects by MWSS, indicating that the projects will be implemented by the agency.

Manila Water proposed to develop medium-term water sources which would have served as a bridge between the limited water supply of Angat and the next big source

Despite the shortage of live water source development projects to serve Metro Manila’s future, Manila Water continued operating and adopting innovative solutions in order to sustain the customers’ experience of 24/7 reliable and clean water supply. The company started experiencing the demand versus supply pinch in the summer of 2016 but fortunately, it was able to harness stored water in the La Mesa reservoir as a buffer for peak demand. Thus, for succeeding years the customers did not experience major water interruptions or reduced pressure.

 

HOW MANILA WATER AND ITS PARTNERS RESPONDED TO THE WATER CRISIS

Manila Water’s Crisis Management Team (CMT) methodically restored services in a well-coordinated recalibrated implementation plan. Pressure management through network distribution adjustments were done to manage demand and equitably distribute available supply across the entire service area. With improved coordination with government agencies and customers, implementation of supply augmentation projects utilizing the entire pool of contractors were completed on target, restoring the service to almost 24/7 by mid-June and within the regulatory standard of 7 psi.

As the El Niño condition continued with less than normal rainfall, Angat’s water levels went down at a faster pace compared to previous years, attaining historical lowest levels. NWRB decided to reduce the allocation to MWSS by 20 percent, from 46 CMS to 40 CMS, further complicating the raw water supply problem not just in the East Zone but in the West Zone as well.

Manila Water’s CMT, together with the resilient workforce of the enterprise, and with the support of regulators and other stakeholders, continue to diligently implement its contingency plans. With this, the company is able to achieve and maintain 24/7 water supply despite the reduction in NWRB allocation.

The following are the key actions taken by the company to restore water services to customers, with support from key stakeholders:

Pressure management through network distribution adjustments were done to manage demand and equitably distribute available supply across the entire service area.

The dataloggers installation project, originally meant for managing non-revenue water by monitoring flowrates in the DMAs in real time, was re-scoped to monitor water pressure at benchmark customers in each DMA, especially in hard hit areas, thus helping provide better situational awareness and augment the information from the walk-the-line efforts of territory managers. A welcome and unexpected development in the pressure reduction initiative was the attainment of non-revenue water to an historical low of 7.5 percent which meant additional water recovered for customers to use.

Energization of the Cardona Water Treatment Plant

Manila Water commissioned in mid-March the first phase of the Cardona water treatment plant with a production capacity of 50 million liters per day, attaining full production in early May. Originally meant for the expansion areas in the lakeshore towns of Rizal, the water produced was diverted via an ‘atras’ line, laid in 2018, to augment the supply to the central distribution system. Phase 2 of the Cardona Water Treatment Plant with a further 50 MLD in capacity was completed in August, realizing the 100 MLD full supply capacity for the customers.

Cross Border Flows from Maynilad

Maynilad expressed support in providing cross border flows to Manila Water in the early days of the crisis, promising as much as 50 MLD. However, the maximum flow attained was only 15 MLD. As Angat levels dropped further at the height of the dry season, Maynilad also had its own supply crisis which led to the suspension of cross border flows.

Preparation of Medium and Long Term Water Sources

Given the current outlook on the Kaliwa and Laiban Dam completion dates due to issues in procurement, environmental permitting and social safeguards, the MWSS reconsidered and approved the projects proposed by Manila Water in previous rate rebasing exercises, particularly the Tayabasan Dam (Calawis) project and the Laguna Lake East Bay water supply project. The Laguna Lake Development Authority endorsed these projects as well, acknowledging in its recently completed master plan that the freshwater lake is a potential water source for Metro Manila and adjacent provinces. By the end of 2019, MWSS also approved a supply augmentation initiative that will utilize Marikina river as an alternative water source.

Responsible Use of Water Campaign

Manila Water, together with the leadership of NWRB, MMDA DPWH and local government units, developed an information, education and communication campaign to encourage the general populace to help conserve water by using water wisely and implement water efficiency measures in the household, leveraging on social media as a platform for engagement.

 

LEARNING FROM THE CRISIS

The water crisis that started in 2019 was an eye opener for Manila Water and its stakeholders. While water supply had been repeatedly identified as a top risk, the company’s efforts towards improving operational resilience has been inadequate to prevent the onset of an incident which caught everybody off guard, propelling action at the national and local levels. There is an imperative to do better.

• Manila Water has to improve on comprehensive risk assessment on water supply as a company top risk, and better processes in identifying and addressing black swans, anchored on precautionary principle/approach.
• Manila Water needs to improve on better relationship management and more aggressive coordination with government agencies to ensure full support and co-ownership of execution plans especially on water security and water conservation.
• Manila Water needs to improve on project implementation, focusing on execution risks, particularly on technical solutions and stakeholder management.
• Manila Water needs to work at strengthening inter-stakeholder operational protocols, address institutional bottlenecks and ensure focused decision making.
• Manila Water needs to strengthen crisis management protocols with extra focus on comprehensive communication plans for all stakeholders before, during and after incidents
• Manila Water needs an improved organizational design that focuses on clarity of core responsibilities, enhanced interdependencies and shared accountabilities, and a retooling of the workforce to enhance competencies and clarify deliverables to internal and external customers.
• Manila Water needs to adopt leaner but comprehensive business processes that ensure fast decision making and better coordination
• Manila Water needs to develop and strengthen water conservation, not just water efficiency, as a discipline and advocacy.

strengthening of partnerships, through constant communication, shared information, co-management of risks and alignment of resources, which will deliver improved water security and better service in the future

Even if the company has managed to restore service to 24/7 but at lower pressures, the fact remains that Metro Manila’s water security is still on edge until the next big water source is completed by the water security agency. In the meantime, Manila Water keeps looking for ways to reduce losses, improve operational efficiency, deliver the MWSS-approved medium term water sources, and engage the regulators and the public in a continuing discussion of the real water situation to encourage water conservation at the community and personal levels.

Manila Water understands that water crises are not solved by stakeholders working in silos. More than ever, it is the strengthening of partnerships – through constant communication, shared information, co-management of risks and alignment of resources – that will deliver improved water security and better service in the future. The company’s partnerships and relationships with partners and customers have repeatedly weathered crises, and Manila Water is hopeful that ongoing efforts will regain stakeholder trust.