Among major Asian cities, metropolitan Manila was infamous for its outdated, inefficient water system. The government agency responsible for delivering water and sewerage services was heavily indebted, and by 1995, three-quarters of the homes in the eastern half of Manila lacked 24-hour water services. Only 8 percent had sewerage connection. Overall, almost two-thirds of the water produced was lost to leaks, poor metering, and illegal connections.
That changed with the privatization of the Metropolitan Waterworks and Sewerage System (MWSS), which followed government legislation in 1995 that fundamentally changed the sector. IFC ultimately helped the government design, manage, and implement a competitive and transparent bidding process for two parallel 25-year concessions that were awarded based on the lowest average water tariff bids. A $7 billion investment to expand and improve metropolitan Manila’s water and sewerage system focused on better service, lower rates, and fewer leaks and illegal connections. Successes included:
- An initial drop in rates of 74 percent in Manila’s east zone and 43 percent in the west.
- In the east zone, households with 24-hour access to water increased from 26 percent in 1997 to 99 percent in 2006, and system losses were cut in half. Sewerage connections also doubled over the same period.
- Manila Water Company’s “Water for the Poor” program now allows residents in the poorest neighborhoods to pay $1.50 per month for clean water, a fraction of what they paid before.