Magdalena Laguna Water System

cancelled

In August 1999, Bayan Water Services Inc. was awarded a 15-year lease contract for the Magdalena Laguna Water system by the Philippine Department of Interior and Local Government (DILG). While the ownership of the system was to belong to the Municipal Government of Magdalena, Bayan Water Services Inc. was to handle its operation and maintenance. Bayan Water won the contract following a competitive bid, beating out South Australia Water Corp, Bi-Water International, and Compagnie Generale De Eaux. The initial service area was to cover 11 barangays with about 3,000 families. Magdalena was one of the poorest municipalities in the country, lying west of Mount Makiling and south of Sta. Cruz. The project included a construction contract awarded to RODMAN Construction and Development Corporation, which offered the lowest bid at P18.92 million (US$480,000), in August 1999. The consturction included digging three deep wells and the construction of pumping stations (the Pronove Pumping Station, the Agapay Pumping Stations, and the Booster Pump Station). It also involved the construction of an elevated reservoir (an elevated water storage tank built inside the Poblacion children's mini-park), the rehabilitation of existing pipeline and reservoir (the Cistem Tank in Burlongan), the construction of 15.62 kilometers of distribution pipelines, and the provision of disinfection facilities for wells. Furthermore, the system was also expected to achieve non-revenue water of 20%; employee per connection ratio of 1:130; collection efficiency of 97%; and 100% service coverage by 2004. Construction started in September of 1999 and was completed in June of 2001, almost a full year behind schedule. Bayan Water Services Inc was a joint venture between the local Benpres Holdings, the listed flagship of the Lopez Group of Companies, (60%) and Montgomery-Watson New Zealand Ltd. (40%). The total fee paid by Bayan Water Services Inc. for the contract was US$1.6 million (PHP 70 million). In 1998, the Municipal Government of Magdalena, through the Development Bank of the Philippines (DBP), applied for a World Bank loan under the Local Government Unit Urban Water Supply and Sanitation Project (LUWSSP) to finance the project. The loan application, worth P24.2 million (US$615,000), was approved in March 1999. On April 24, 2002, Mayor Agapay and representatives from the World Bank, DBP, and DILG agreed to dissolve the contract with Bayan Water Services Inc. over complaints that the water was unsafe and tariff rates were too high. The representatives permitted the Municipal Government of Magdalena to rebid the project as soon as possible. None None