Manila Water forms subsidiary for Laguna project

Ayala-led Manila Water Co. Inc. on Friday announced that it has completed its acquisition of a controlling stake in a company that supplies water in Laguna, one of the more highly-developed provinces in the country. Manila Water told the Philippine Stock Exchange that it has completed the takeover of control and management of AAA Water Corp. (AWC), which holds 70 percent of Laguna AAA Water Corp. (LAWC), a joint venture between AWC and the Laguna provincial government. Manila Water paid “around P180 million" for the acquisition, Rene Almendras, Manila Water president, earlier told GMANews.TV. The completion of the acquisition paves the way for a joint venture agreement between Manila Water and the provincial government of Laguna. The agreement will create a new joint venture company, to become a subsidiary of Manila Water and will be called the "Laguna Water Company Inc." Laguna Water will be operating under a concession agreement (CA) patterned after Manila Water's own CA with the Metropolitan Waterworks and Sewerage System (MWSS). Under the CA, Laguna Water will have a 25-year exclusive right, renewable for another 25 years, to service the water requirements of the entire Cabuyao, Sta. Rosa City and Binan. Tariff rates for Laguna Water will be set by the National Water Resources Board. Laguna Water has allotted P2.5 billion for its capital infrastructure program that will include pipeline requirements and construction of water treatment facilities for the next 10 years. Of the P500-million authorized capital stock of Laguna Water, Manila Water's equity contribution will be 70 percent, while the Laguna provincial government will contribute the balance of 30 percent. Manila Water’s entry into the Laguna water concession stemmed from a share purchase agreement it signed with Asia Water Ltd., which owned 65 percent of AAA Water. Manila Water likewise concluded an agreement with All Asia Development Corp. for the acquisition of the remaining 35 percent in AAA Water. The Ayala-led company has also acquired the water and wastewater operations in Boracay Island. Manila Water, which services 5.6 million people in the east zone of Metro Manila, has started its operations in 1997. It has reduced its water losses from 63 percent to less than 20 percent presently. On Friday, Manila Water shares closed 1.6129-percent higher to P15.75 apiece. - GMANews.TV