Olongapo sells 10% of Subic Water to Maynilad
OLONGAPO CITY, Philippines - The Olongapo City government has sold its shares in Subic Water to Maynilad Water Services Inc. to continue modernizing the city's water utilities services.
Mayor James Gordon Jr. signed an agreement with Maynilad President and CEO Victorico Vargas on March 15 to transfer 10% of Subic Water to the west zone concessionaire of Metro Manila for P210 million after a public bidding process.
With the sale, Subic Water, which serves 40,000 customers within Olongapo and the Subic Bay Freeport Zone, is now nearly fully privatized. Only 20% of the company is owned by government through the Subic Bay Metropolitan Authority, which also expressed intention to sell its stake.
Maynilad is jointly owned by Pangilinan-led Metro Pacific Investments Corp. and Consunji-owned DMCI Holdings Inc. The groups sold part of their stake in the water distributor to Marubeni Corp. of Japan.
Subic water currently serves 40,000 customers in Olongapo City and the Subic Bay Freeport Zone.
The city's power distribution facility was also recently privatized when President Benigno Aquino III approved Republic Act No. 10373, giving a 25-year franchise to the Olongapo Electricity Distribution Company (OERC).
RA 10373 noted that the company must "supply electricity to its captive market in the least costly manner" and also stipulated that the franchise could be revoked if "the grantee fails to operate continuously for two years."
The rehabilitation of the city's power system is expected to cost at least P1 billion.
Gordon said that OERC will modernize the city's power distribution system and improve its infrastructure.
He added that proceeds of the sale of the shares in Subic Water to Maynilad "will enable the city to fund programs for residents of Olongapo and embark on projects that will benefit them."
Residents of Olongapo can "look forward to more efficient services from these firms, and an added boost to initiatives of the city that will raise the quality of life in Olongapo," the mayor said. - with reports from Carlos Santamaria/Rappler.com