L. Joseph
Phone: (202) 473-7700
Fax: (202) 676-0365


WASHINGTON, D.C., Nov. 10 -- The International Finance Corporation (IFC) has signed an agreement with the Government of the Philippines to act as lead advisor on the proposed privatization of the Metropolitan Manila Water and Sewerage System (MWSS), the Government-owned water supply, treatment and distribution utility. The agreement was signed in Manila today by Secretary Gregorio Vigilar of the Department of Public Works and Highways, Government of the Philippines, and Mr. Philippe Liétard, Director of IFC's Corporate Finance Services Department. MWSS provides water supply and sewerage services to the six cities and 31 municipalities within Metropolitan Manila, an area comprising 11 million residents. Less than ten percent of the service area has sewerage connections, posing significant environmental and public health hazards. MWSS produces close to 2.5 million cubic meters of water daily, but supply is intermittent and the rate of water loss due to leakages and theft is almost 60 percent. Inefficient operat
ional practices and improper maintenance have caused commercial losses at a rate of nearly 15 percent. The Government's decision to privatize MWSS is part of a wider initiative to tackle an impending water supply crisis in the Philippines that could become as serious as the 1990-91 power crisis. This initiative, which includes the commissioning of water supply projects under Build-Operate-Transfer (BOT) arrangements, is strongly supported by the Government. Presidential approval has been given for the privatization of MWSS and for the appointment of IFC as lead advisor. "This project, which is the first large-scale water privatization in Asia, will bring a cleaner, more reliable water supply and modern sewerage services to the citizens of Metro Manila," said Mr. Liétard. "Through our work in the power sector, IFC has helped improve the delivery of electricity in the Philippines, and we look forward to working with the Government to achieve similar success in the water sector," he added. (more) Press Release N
o. 96/53, page 2 of 2 IFC will prepare MWSS for privatization, design an operating and investment agreement, and supervise the competitive bidding procedures that will bring international operators and investors into the sector. Throughout the assignment, the Corporation will coordinate and integrate the work of all consultants, including Sogreah, the technical consultants for whom the French Government has provided grant funding. As the private sector development arm of the World Bank Group, IFC has worldwide experience in the privatization of state-owned utilities and plays a crucial role in helping provide needed comfort to prospective private investors while ensuring the protection of the country's interests as well. IFC will be working closely with the World Bank in the design and implementation of the privatization program. IFC is the largest multilateral source of equity and loan financing for private sector projects in developing countries.