Ayala, MVP, Gaisano groups seal deal for Cebu water supply
MANILA, Philippines - Three of the country's largest business groups have forged a partnership to proceed with a water supply venture in Cebu.
The waters services units of diversified conglomerates Ayala Corp. and Manuel V. Pangilinan-led Metro Pacific Investments announced that they have formed a partnership to develop and manage the first large-scale public-private-partnership (PPP) project that the local government of Cebu has rolled out.
Ayala-led Manila Water Company, a concessionaire of the east zone water services in Metro Manila, and Metro Pacific Water Investments Corp, which has a stake in Manila west zone concessionaire Maynilad Services Inc., has agreed to a joint venture that also involves Cebu-based Gaisano Group.
The consortium will still be majority controlled by Manila Water, which won the bidding after a Swiss challenge in February, with a 51% stake.
Metro Pacific Water agreed to a 39% stake, while the Gaisano group has 10% in the consortium.
The Cebu Bulk Water Supply Project is is expected to provide 35 million liters per day of bulk water and address the deteriorating groundwater condition in the island province.
Manila Water President and CEO Gerardo C. Ablaza, Jr. welcomed the partnership with Metro Pacific Water into the consortium.
“The strengths and capabilities of these new partners combine to create a distinctive value proposition to enhance water supply development in Cebu and greatly promote sustainable development of the province,” he said in a statement on Sunday, November 18.
“More than an investment venture, this is really public private partnership at its best. You have a progressive provincial government and two committed private companies working together to give Filipinos a better life,” said Metro Pacific Water President and CEO Victorico P. Vargas.
The two business groups are competitors in the telecommunications industry -- via competing Smart and Globe brands -- but are partners in rail-related ventures. Both are eyeing the Metro Rail Transit Line 3 deal, and have submitted a bid for the Light Rail Transit (LRT) Cavite extension project.
Ayala has also entered into a partnership with the Cebu-based Aboitiz family for the PPP deal in nearby Mactan airport. Aboitiz executives have previously expressed they were interested in water deals, too. - Rappler.com