Olongapo City faced an impending water crisis in the mid-1990s. Water facilities were mostly dilapidated, raw water sources were so scarce, and the former water district which operated the utility lacked the badly-needed capital to rehabilitate the water system.
As a result, residents of the 17 barangays comprising the city suffered from inadequate and intermittent supply, low water pressure, turbid water, and poor customer services.
Meanwhile, the adjoining Subic Bay Freeport— the former US Naval Base that was converted into an eco-tourism and commercial hub— holds abundant raw water supply. Demand for commercial water was on the rise due to the influx of investors who were attracted by the competitive business incentives offered here by the government.
To solve the impending water crisis in Olongapo City, and to secure the future water requirement of the booming Subic Bay Freeport, a novel solution was proposed. This was how Subic Water and Sewerage Co., Inc. (SUBICWATER) was born.
Promises Too Good to Be True?
Being the first has not always been easy. As the company was being set up in the mid 1990s, the company was met with a lot of skepticism, even with apprehension, as the idea of a privatized water utility was a thing still unheard of in this country. SUBICWATER, however, assured the people of Olongapo City and Subic Bay Freeport that the impending water crisis will definitely be averted, and that the private-public-partnership (PPP), under a build-operate-and transfer (BOT) setup of the company, will work for the benefit of the community.
It was a bold statement, especially for a city where water containers of all kinds and sizes littered the thoroughfares, lying in wait for water-hauling trucks to stop by. Workers in the former naval base, after punching out from their jobs, fill up smaller water containers which they bring home for their cooking and drinking. On weekends, throngs of people flock to where the Old Dam is now located to do their laundry.
Some barangays in the northern part of the city, meanwhile, are lucky enough to get intermittent water supply from the overloaded city treatment plant. The water coming out from the tap, however, had to undergo further filtration, or had to be collected and left alone for some time for its impurities to settle. Boiling the filtered water was usually done to ensure that it is fit for drinking.
Raw water was scarce, water treatment facilities were fully depreciated, and no adequate funding was available to rehabilitate the dilapidated water system. SUBICWATER’s promises must have seemed too good to be true back then.
SUBICWATER: Leading the Way
SUBICWATER was given the exclusive right to operate the water and sewerage systems of the two areas under a 30-year franchise term. This arrangement was beneficial because the two previously separate systems were made to complement each other. Aside from guaranteeing a superior level of service for the consumers, the arrangement also benefitted the government in the following ways
Olongapo City and the Subic Bay Metropolitan Authority (SBMA), the agency that governs the Subic Bay Freeport, need not allocate financial and human resources, yet they would receive lease payments for the entire franchise term.
Aside from lease payments, the two agencies would also receive dividends as each has a 10% and 20% equity in SUBICWATER, respectively. (Olongapo City, however, opted to sell its 10% stake in the company to Maynilad Water Services Inc. or Maynilad in 2013.)
Consumers will be assured of a high level of service as ascertained by the Subic Bay Water Regulatory Board, an independent body.
The government retains ownership over its water and sewerage facilities, as these were merely leased— not purchased nor transferred.
At the end of the franchise term, the entire water and sewerage system—all investments on facilities, including those constructed during SUBICWATER’s operations— will be turned over to the government in prime condition.
After 16 years
From 20,000 connections in 1997, the company now serves more than 40,000 accounts. From ten million liters (MLD) a day, SUBICWATER now can produce up to 42 MLD of high-quality water.
Total capital investments have totaled P1.043 billion since the start of the company’s operation in 1997, and this figure will continue to rise over the years.
As SUBICWATER strived to deliver world-class services, it became the first water and sewerage utility in Southeast Asia that was certified to comply with ISO standards. Customers themselves could attest that services have greatly improved ever since SUBICWATER took over the operations. The company clearly demonstrated how a PPP-BOT scheme can revolutionize basic public services such as water and sewerage services.
These are just some of the achievements will prove indispensable to the fulfillment of SUBICWATER’s vision: to be the benchmark of excellence in the water and sewerage services industry.