Demand for utilities dampened by flooding

MANILA, Philippines – The severe flooding that swamped half of Metro Manila this week temporarily dampened demand for water and electricity, and use of tollroads, according to executives of Metro Pacific Investments Corp (MPIC).

Monsoon rain enhanced by a tropical cyclone outside the Philippines battered the capital and several parts of Luzon, causing floods and landslides that killed 49 people starting August 7. Weather conditions improved on August 9.

“I think we will have a dampening on demand that’s (only) temporary… I would say for a few days,” said MPIC Chairman Manuel V. Pangilinan at a recent press briefing.

MPIC controls Manila Electric Co (Meralco), the country’s largest power distributor, Maynilad Water Services (Maynilad) one of the two water concessionaires in the capital, and Metro Pacific Tollways Corp (MPTC), an infrastructure company that operates the North Luzon Expressway (NLEx) and other major thoroughfares in the country.

“I think that we see for example the situation of power sales for Meralco is down temporarily for the rainy period simply because the temperature is much lower, we have classes and offices closed for a few days,” said Pangilinan.

“So I think we should expect a temporary dampening in demand but I think once we return to normal it should pick up,” he added.

He said Maynilad was probably the most critically affected of their subsidiaries. “We’re laying out new pipes and of course that will be affected,” he said. Pangilinan explained that the flooding will cause delays in connecting more customers to their water grid, which could lower future volume of sales. On top of which, he said they were still assessing if there was damage to the existing network that they would need to repair.

Maynilad chief financial officer Randolph T.Estrellado explained that the cleanup of flooded areas could result in a higher sales volume that would allow them to recover some lost sales. He said rival Manila Water Co Inc of the Ayala group experienced this post-typhoon Ondoy in 2009 “because they are in Marikina area, their volume of water did go up due to the cleanup operations and we will probably also see a pickup when they clean up Manila.”

He added the company is making deliveries in areas where their water supply was reduced to keep the business fully operational.

MPIC’s tollroad business also suffered losses. On the morning of August 7, flooding from overflowing dams and rivers forced them to close the entry and exit points in 5 areas of NLEx, one of Metro Manilas main connectors to Central and Northern Luzon. At one point, the flood water at the Valenzuela section of the expressway was chest deep.

Pangilinan added that they had operations teams in place at every utility to keep business running as smoothly as possible. “The principal has always been that even at the height of the rains we kept our operational teams in place, whether it’s power, water or toll roads,” said the MPIC chairman. – Rappler.com