Capitol: No award yet despite private firm’s PSE disclosure

Tuesday, February 7, 2012

AN Ayala-led consortium may have won the bid to implement a bulk water supply project that will tap Luyang River in Carmen, but the private group still has to get over some “formalities” before the Cebu Provincial Government awards the undertaking.

Capitol Spokesperson Rory Jon Sepulveda they will give full details about the awarding of the project to Manila Water Consortium in a press conference today.

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Sepulveda was reacting to the disclosure of Manila Water, an Ayala company, to the Philippine Stock Exchange (PSE) yesterday. In the disclosure, Manila Water said the Cebu Provincial Government “has awarded” to the Manila Water Consortium the “development, operation and maintenance” of a bulk water supply project in northern Cebu.

The project will involve the production of 35 million liters (35,000 cubic meters) a day of potable water to northern and central Cebu, including Metropolitan Cebu Water District (MCWD).

A price challenge was undertaken to determine who will undertake the Carmen bulk water supply project.

The Manila Water Consortium—composed of Manila Water, Vicsal Development Corp. (behind the Metro Gaisano group) and Stateland Inc.—is the original proponent of the project.

Its bid was challenged by Cebu Water Consortium, which offered P13.95 per cubic meter for water from Luyang with a 19.26-percent projected internal rate of return.

Under the Swiss Challenge scheme, the original proponent (Manila Water Consortium) was given a chance to match the bid of its challenger, which it did.

Metro Maynilad also participated in the challenge but its bid of P18.71 per cubic meter was deemed too high.

In the disclosure to the PSE, Manila Water legal and compliance officer Lizelle Zamora-Dimacuha said that with the issuance of the award, the Province and the Manila Water Consortium will negotiate and execute a joint investment agreement with 49 to 51 percent equity participation.

Cebu Gov. Gwendolyn Garcia earlier said the bulk water supply project is one of the biggest ventures of the Province in partnership with a private company.